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Economics/indirect tax on smoking


Discuss whether high indirect taxes are the best way to discourage smoking.

Taxes, by themselves, on things such as tobacco, alcohol, and drugs don't generally discourage use.  Instead, taxes on these vice goods have the effect of pushing the supply into the black market.  Declined use of these products has been more greatly accomplished by using tax revenues to fund rehabilitation programs, and prevention/education programs that target not only the negative health effects (the honest ones, not the propaganda that was common with the US D.A.R.E. program, which actually increased use), but also the negative social effects.  By making these goods available, you are taking away the "forbidden fruit" temptation, and when combined with proper prevention/education programs, you can dramatically decrease the number of young people who use these products.  By funding rehabilitation programs and other programs to help people quit, you can help those few remaining individuals to quit once they have started, while also helping those who were using beforehand to also quit.  What you end up with is a market for these goods that is quickly aging, and with the health issues associated with these products, the market will shrink to a tiny fraction of its previous size.


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Michael Taillard


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