Tax policy is the choice that the government makes on the amount of tax to charge on a product, to what amount as well as the people to pay it (Pechman 23). This discussion will focus on tax policy on tobacco products. According to Centers for Disease Control and Prevention posted in 2014, an estimate of forty million of United States adults smoke tobacco and its products (Retrieved from http://www.cdc.gov/tobacco/data_statistics/fact_sheets/adult_data/cig_smoking/). With this large number of tobacco smokers, the US government can implement a tax policy that would favor both them as well as the users.
While implementing the tax policy, it will be advisable to focus on value added tax (VAT), excise taxes, overall sales taxes, tobacco products import and exports. Excise tax will focus on specific based on the weight of the tobacco, and ad valorem based on the factory price or the price from the retailers. On this note, the more the tobacco, the more the tax, and the more the selling price from the manufacturer, the more the tax. The tax will be inclusive of the selling price of the tobacco products, meaning that tax will be automatically deducted once the purchase has already been made, depending on the quantity.
The statistics from abc shows that tobacco consumers have reduced dramatically. This is because of increased tax on tobacco products, so as to reduce the numbers of people that take them. This is not right as tobacco products give more revenues that stabilize the government. The best thing to do is to release as much tobacco products as possible with reduced taxes similar to other basic needs. Then, the medical researcher can look for medicine that once incorporated to the tobacco products, it will reduce health hazards associated with tobacco. By doing this, the government will have no fears that tobacco products will affect people’s health, and this will make them lower their taxes, thereby getting a standard amount of taxes that will add revenue to the government (Guindon et al. 36).
Works Cited
Centers for Disease Control and Prevention. Current Cigarette Smoking Among Adults in the United States. “Web”. 2014.
Guindon, G. Emmanuel, Steven Tobin, and Derek Yach. "Trends and affordability of cigarette prices: ample room for tax increases and related health gains." Tobacco control 11.1 (2002): 35-43.
Pechman, Joseph A. Federal tax policy. Vol. 23. Brookings Institution Press, 2001. Print.
