Taxation of Unhealthy Products

The United States has a long history of taxing unhealthy products, colloquially referred to as “sin taxes.” The most common products with excise taxes are alcohol and cigarettes. Some states and localities also tax (or propose to tax) other unhealthy products such as soda, candy, and fast food, which leads to much controversy. Proponents argue that they generate revenue to offset the additional demand on public resources caused by the negative effects of consumption; opponents argue that these taxes are regressive and place an undue burden on the poor.

The first excise tax was proposed on alcohol by Alexander Hamilton in 1791. Although defeated by the Whiskey Rebellion, it demonstrates that alcohol has long been viewed as a luxury and as a product needing to be ...