NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Taxing Consumption and Other Sins

James R. Hines Jr.

NBER Working Paper No. 12730
Issued in December 2006
NBER Program(s):   PE

Throughout American history, the U.S. federal and state governments have imposed excise taxes on commodities such as alcohol and tobacco (and more recently, gasoline and firearms). Rates of such "sin" taxation, and consumption taxation broadly (including sales taxes and value-added taxes), are currently much lower in the United States than they are in Europe, Japan, and other affluent parts of the world. In part, this reflects relative government sizes, but that is not the whole story, since even controlling for total tax collections, levels of national income, government decentralization, and openness to international trade, the United States imposes unusually low excise and consumption taxes. As a result, the United States relies to a much greater degree than other countries on personal and corporate income taxes, thereby affording fewer opportunities to use the tax system to protect individuals and the environment by discouraging the consumption of "sinful" commodities, and instead simply discouraging saving and investment.

download in pdf format
   (197 K)

email paper

This paper is available as PDF (197 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w12730

Published: James R. Hines, 2007. "Taxing Consumption and Other Sins," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 49-68, Winter. citation courtesy of

Users who downloaded this paper also downloaded these:
Auerbach w12307 The Choice Between Income and Consumption Taxes: A Primer
Ayyagari, Deb, Fletcher, Gallo, and Sindelar w15124 Sin Taxes: Do Heterogeneous Responses Undercut Their Value?
Lyon and Schwab w3932 Consumption Taxes in a Life-Cycle Framework: Are Sin Taxes Regressive?
Auerbach and Hines w8181 Taxation and Economic Efficiency
Evans, Ringel, and Stech Tobacco Taxes and Public Policy to Discourage Smoking
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us