Self-study
Politician: Governments should tax any harmful substance that is available to the general public at a level that the tax would discourage continued use of the substance.
Summary
For any harmful substance available to the general public, the government should tax that substance at a level that discourages use of the substance.
Find or Complete the Application
Let’s look for an answer that involves the government taxing a harmful substance at a level that discourages use of the substance. Wrong answers will probably involve taxes of substances that aren’t harmful or failure to tax a harmful substance at a level that discourages use of the substance.
1.
Which one of the following ██ ██ ███████████ ██ ███ ████████████ █████████ ██ █████████
a
The tax on ████████ ██████████ █████ ██ ██████ ██ ██ ██████ ██ █████ ███████ ██ ██ ███████ ██ ███ ██████ █████ █████████ ████ ███ █████████ ███ ██ █████ █████████
(A) concerns raising taxes for the purpose of raising revenue. It’s not clear whether this discourages people from using sugar or is designed to discourage use.
b
The tax on ███████ ████ █████████ █████ ████ ██████ ████████ ███ █████████ ████ ███ ███████ ██ ███████ █████ ███████ ████ █████ ████ ███ ██████ ███ █████ ████████ ████ ███ ██ █████████
(B) involves a tax that is NOT expected to affect use of the substance.
c
The tax on █ █████████ ████ ████████ ██ ███████ ████████ ███████ ██ █████ ██████ ██ ██████ ██ ████ ██████ ██ █████████ ██ ████████ ██████████ ███ ██████████ ███ █████████
(C) is the only answer that involves a tax designed to discourage use of a harmful substance. That’s why it’s correct.
d
The tax on ████████████ ████████ █████████ █████████ ██ ███ ███████ █████ ██████ ███████ ████ ████ ███ ███ █████ ████ █ ████████ ██████ ██ ███ ███████ █████████
(D) involves not raising a tax because of a higher tax’s impact on an industry. This doesn’t follow a principle advocating that the government should tax something.
e
The tax on ████████ ████ ████ ██████████████ ██████████ ████ ████ ██████ ██ ██ ███████ ██ ███ ███████ █████ ██████ ██ ███████ ██ █████████ ███ ███████████ ██ ████ ████ ███████████████ ███████ ████ ██ █████ █████ ███████████
(E) involves lowering a tax to encourage research. This doesn’t involve setting tax at a level that discourages use of the harmful substance.