One Salient Oversight on Sin Taxes
One Salient Oversight, posts on a question I’ve always found interesting:
Tax revenue raised from penalties and taxes designed to discourage certain societal behaviour is problematic. Government has learned to rely upon these revenue streams in order to fund certain government activities (like law enforcement). This allows the toleration of some level of illegal, unhealthy and/or dangerous behaviour in society in order to fund government spending. Raising these taxes and penalties is therefore problematic as it both reduces a potential revenue stream while raising political issues with voters who see such rises as merely revenue raising. If this revenue is directed towards the central bank for money destruction, instead of government treasuries for spending, then these penalties can be raised with less political fallout.