San Francisco Mayor Gavin Newsom recently proposed a new 33-cent tax on a pack of cigarettes to help pay for the city’s annual $10.7 million litter-collection program, which includes removing cigarette butts from gutters, drainpipes, and sewers. Though this litter tax may be unique, San Francisco is not alone in targeting sin taxes this year. At least 25 states want to raise tobacco taxes, and 12 would either create or increase taxes on alcohol. While smoking, drinking, and littering are relatively easy political targets when more tax revenue is needed, raising sin taxes to fill large and growing budget deficits during a recession might be more regressive and less countercyclical than other options. What’s more, in the case of city taxes, they may not raise much additional revenue.
