How Sin Taxes Actually Change Behavior

Episode 25 of The Tax Policy Podcast dives into the real-world impact of sin taxes—levies on alcohol, tobacco, and sugary drinks designed to discourage consumption. Lucas and Luna examine a 2023 study from the National Bureau of Economic Research that found a 10% increase in soda taxes reduced consumption by 11% in Philadelphia, but also led to a 5% increase in cross-border shopping to avoid the tax. They explore the tension between public health goals and regressive tax burdens, and ask: do sin taxes actually work, or do they just shift behavior? The episode also touches on the history of tobacco taxes in the U.S., the rise of sugar taxes in Europe, and what a hypothetical federal sugar tax might look like. A candid conversation about the limits of taxation as a behavioral tool. #SinTaxes #BehavioralEconomics #PublicHealth #TaxPolicy #SodaTax #TobaccoTax #AlcoholTax #RegressiveTax #Philadelphia #NBER #SugarTax #ExciseTax #CrossBorderShopping #TaxBurden #Elasticity #Economics #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo