'Sin Taxes' May Be Raised in Chicago - Chicago News and Weather | FOX 32 News

'Sin Taxes' May Be Raised in Chicago

We're talking about sin taxes - when the government puts a tax on something to discourage people from using it - and also, to make money.

The City of Chicago is considering a new tax on sugar-sweetened drinks like soda pop. The City Health Committee held a hearing Wednesday about it.

Currently, the tax is three-percent. The city is looking at raising it to anywhere from $0.15 to $0.30 per container. Another possibility is one-penny per ounce.

Supporters point to high obesity rates and say a tax would cut down the guzzling and make people healthier.

Businesses and their workers oppose the tax. They say it would kill jobs in the beverage industry

University of Chicago economist Allen Sanderson has an interesting take on sin taxes. He said they do discourage people from using the items being taxed.

But he thinks the level of taxation should equal the cost the so-called "bad" behavior extracts from society.

Based on that concept, he says, cigarette taxes are probably too high.

He said smokers do rack up a lot of healthcare costs in their lifetimes, but their lives tend to be shorter, so they don't need as much care in old age, and they don't use as much social security.

Sanderson said alcohol taxes are too low compared to the costs they create in healthcare, drunk driving deaths, and violence.

Also too low, he says, are gambling taxes, because gambling can cause financial and family ruin.

He says education is a better way to go.

The Chicago City Council seems to be looking only at sugar-added drinks for the tax, not diet drinks made with sugar substitutes.