Other products should be taxed according to the negative externalities that they cause as well, whether they be Cheetos, home heat fuel, plasma TVs, or whatever. Only by paying the “full” price of a product at the time of purchase will we have any incentive to curb our use of dangerous, deadly, polluting, etc. products.

It’s been estimated that if you take into account all the factors need to deliver a gallon of gasoline to the pump, and then pay for all of the health problems, etc. that result from the use of gasoline, it would cost about $12/gallon. We pay for this anyway, so why not be up front about it?

The problem is that the goals are mutually exclusive. If there is less demand because of the higher prices, revenue will also decrease. Similarly if revenue increases, then this isn’t an incentive to quit smoking.

A third problem that New York has made famous is that while smoking is hard to quit (thus cigarettes are an inelastic good), consumers have the ability to buy these goods in many places. Instead of accomplishing either goal, smokers now cross state lines to buy their cigarettes enriching other states and providing no incentive to quit.

I wouldn’t be opposed to a tax on junk food either. When people make a choice to over-indulge in things that are known to be bad for their health, I think there should be a price attached. Everything in moderation.