New York State imposes some of the highest "sin tax" rates in the country. When I say "sin tax", I'm referring to excise taxes on items such as cigarettes, tobacco, fuel and liquor. Some claim the high taxes on these products helps reduce demand. Does the high excise tax rates on these products actually reduce demand for these products? Do the taxes encourage illegal behavior? It's estimated that more than 50% of all cigarette sales in NYS are made illegally. Would reducing or eliminating these taxes actually bring in more revenue to the State than if the taxes remain high?

New York State imposes some of the highest "sin tax" rates in the country. When I say "sin tax", I'm referring to excise taxes on items such as cigarettes, tobacco, fuel and liquor. Some claim the high taxes on these products helps reduce demand. Does the high excise tax rates on these products actually reduce demand for these products? Do the taxes encourage illegal behavior? It's estimated that more than 50% of all cigarette sales in NYS are made illegally. Would reducing or eliminating these taxes actually bring in more revenue to the State than if the taxes remain high?

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter20: Elasticity: Demand And Supply

Section: Chapter Questions

Problem 10E

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