Ever since man has existed there has been sin. While people sin differently, everyone has their flaws. Even though many taxpayers feel as though the amount of money they lose to the government is sinful, the government on the other hand loves to tax “sin.” Many sins come in the form of vices, products or hobbies that are known to be addicting and that many people can’t help but indulge in. Lawmakers love to indulge in these vices just as much as the people who are addicted to them. That’s because taxing sins is a great way to make extra money to fill government coffers, especially when there seems to be a shortage from other typical revenue sources. So what kinds of sins, or vices, are the best for the taxman and which states love to tax “sinners” the most?
The most common “sins” that the taxman goes after are alcohol, tobacco and gambling. The funny thing about sin taxes is that most people seem to favor them, even though many of those same people participate in those very “sins” and must pay the tax for them. According to information from the U.S. Census Bureau and GOVERNING, in the year 2014, as much as $32.5 billion was collected in sin taxes by all states collectively. The biggest target of sin taxes was clearly tobacco, which was taxed to the tune of $16.9 billion in 2014. Alcohol was second with $6.2 billion and gambling rounded out the top three at $5.6 billion.
For smokers the news gets even worse, because as more people have become aware of the health hazards of smoking, fewer people are doing it. To make up for the difference, lawmakers continue to increase the taxes on tobacco. In fact, collectively states issued 111 tax increases for tobacco products between 2000 and 2015. By way of comparison, states only increased alcohol taxes over that same time period 23 times. For those who have switched to e-cigarettes, several states are also considering implementing taxes on those as well. However, with all that being said, sin taxes still don’t represent a major portion of the total tax bill, as they accounted for only 3.8 percent of total tax revenue collected in 2014.
Meanwhile, because there are seven deadly sins, let’s look at the seven states that rely the most on sin taxes to help fill their state coffers. Coming in at number seven is Pennsylvania, which collects 8 percent of its tax revenue from sin taxes. Louisiana is number six at 9 percent preceded by Delaware at 9.4 percent. At number four is New Hampshire at 9.9 percent and West Virginia is number three at 11.5 percent. Number two on the list should be no surprise as it is often referred to as “sin city.” It’s Las Vegas at 14.8 percent. However, Las Vegas was outdone by Rhode Island, which collects a whopping 15.9 percent of its tax revenue from sin taxes. So there you have it. If you like to indulge in these particular sins, then you might want to reconsider where you call home.
This post was published on January 25, 2016