Definition of Sin Tax
What is a "sin tax"? What is the definition of the term "sin tax"?
A "sin tax" is a tax that is levied on a product or service that is seen to be "unwanted" by society.
The most common forms of "sin taxes" are taxes on cigarettes and alcohol. Cigarette taxes are especially popular due to the large number of deaths caused by smoking cigarettes, as well as the high health care costs that tobacco smokers incur every year.
"Sin taxes" can also include taxes on soda, fast food and just about anything else that is deemed to be "unwanted" or "harmful" by society.
Sin taxes can also be charged on "services" such as gambling and prostitution.
When looking to raise revenues and close budget gaps, politicians will often turn to "sin taxes" first because they impact a smaller percentage of the population (compared to raising income taxes, etc).
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