The Sin Tax

Interestingly, this is the name of the new tax that the government plans to put on tobacco and liquor, in order to finance the health budget in 12th Plan(2012-2017). At the same time it is being argued that it will reduce instances of non-communicable diseases (NCDs) like diabetes, stroke, high blood pressure, cardiovascular diseases etc. as there will be less smoking and drinking.

The Sin Tax experiment has been around for quite some time in other countries as well. There have been oppositions as well. One of the criticism is that it is regressive in nature as the rich will continue to smoke and drink, the poor will have to shell out more share from their meager income. The underlying assumption being that increasing tax will hardly be a deterrent.

Talking of deterrence, we first put statutory warning on the cigarette packets - "smoking is injurious to health". Nobody cared. Then we put an image of an infected lung of a smoker. Still nobody cared. 

Each of us loves to Sin. But wait! There is another aspect of smoking -

The bottom line is the tax increase, for the least, can help fund health improvement/investment on others.