assignment 5 eng 215

ENG 215

August 1, 2017

Introduction

Alcohol and tobacco are highly used drugs in our country. Should taxes be imposed on the two drugs to enable the country to meet the rising medical costs? Increasing on the two drugs will provide some amount used to cater for the medical costs but will his be able to solve it. Raising taxes on the two drugs will affect the performances of the different companies and users of both alcohol and tobacco (Chaloupka, 2011). Will the imposition of high taxes on alcohol and tobacco be capable of providing medical costs for the different patients? Will the taxes affect the consumption patterns of the different individuals in our society and how will this benefit the medical field? These are discussed below.

History of the problem

Medical costs in the US have been consistently increasing over the ears resulting from the different increases in the number of the smokers and drunkards in the nation. Most of the individuals who drink alcohol or smoke tobacco are in the high levels of being infected by different illness like the lung cancer, heart disease and the liver cirrhosis whose medication is quite expensive (Chaloupka, Yurekli & Fong, 2012). The rising of the taxes in the two drugs will be one of the strategies of reducing the medical costs involved through reducing the number of the different drunkards and smokers in the country which also face some challenges.

Problems of imposing taxes on alcohol and tobacco

Unemployment

The increase in the taxes to the alcohol and tobacco consumption will highly affect the different industries in the US because an increase in taxes will lead to extra costs in their operations. This high taxation will make different companies to employ different strategies of minimizing the costs like the laying down some of their employees which will lead to high levels of unemployment in the economy (Grossman, 2013). The high levels of unemployment will lead to increase in the levels of dependency ratio among the few employed ones which leads to low living standards.

Reduction in government revenues

The imposition of the taxes on alcohol and tobacco will also affect the level of the government revenue collected from the different companies involved in these businesses. Most of the individuals who smoke and take alcohol will reduce their consumption rate and this will mean that there will be a reduction in the amount available for the different companies to pass the tax on the income earned after the process has occurred (Karanikolos, 2013).

High taxes will mean most of the different intended companies who were in the verge of entering into the market for the business will deviate their ideas in fear of facing challenges of being in loss making process which will mean that the different charges in the process of business legislation and taxes on their activities will not be earned by the government and hence reduce their level of the available incomes in form of revenues. The reduction in the available incomes in the government as revenues will hence affect their investments in the medical field in form of buying technologically advanced machines for the treatment of the different illnesses among the different individuals.

Increased consumption of alternative drugs

Higher taxes on the alcohol and tobacco may force the users more so those who are addicted to shift to the use of other drugs like the consumption of higher tar and higher nicotine cigarettes which will lead to high levels of change in the consumption of both the alcohol and the tobacco. The consumption of these two drugs will also be in the high levels of causing infections to the different individuals and hence the medical costs will also remain not be high. High taxes will affect the different consumers of the two drugs and highly affect the poor individual who are not able to maintain the same trend of taking the two drugs (Karanikolos, 2013). The poor ones who are highly addicted will hence find an alternative which will be through shifting their consumption to other lowly priced drugs in the economy and hence there will be reduction in the consumers in alcohol and tobacco but an increase in the demand of the other related drugs like the high nicotine cigarettes. These cigarettes will also cause the different health difficulties among the different consumes who will be using them and hence here will be no changes in the medical costs.

Conclusion

Higher taxation on the alcohol and tobacco though will lead to a rise of different problems in the economy like unemployment, reduction in the government revenues and shifting of the different consumers to other drugs should be implemented. Implementation of the high taxes on the two drugs will lead to an increase in the process of their products which will make most of the users to reduce their usage rate and this will have a long-term benefit to the economy and the medical field (Grossman, 2013). The high taxes will mean that there will be the reduction in the number of the increasing diseases resulting from their consumption like lung cancer and hence this will lead to a reduction in their medical costs. Hence, the government should impose high taxes on the alcohol and tobacco.

References

Chaloupka, F. J., Yurekli, A., & Fong, G. T. (2012). Tobacco taxes as a tobacco control strategy. Tobacco control, 21(2), 172-180.

Grossman, M., Sindelar, J. L., Mullahy, J., & Anderson, R. T. (2013). Policy Watch; Alcohol and Cigarette Taxes.

Karanikolos, M., Mladovsky, P., Cylus, J., Thomson, S., Basu, S., Stuckler, D.,& McKee, M. (2013). Financial crisis, austerity, and health in America. The Lancet, 381(9874), 1323-1331.

Xu, X., & Chaloupka, F. J. (2011). The effects of prices on alcohol use and its consequences. Alcohol research and health, 34(2), 236.