March 2014
 
So‐called “sin” taxes are very much in fashion in France and elsewhere. With the aim of reducing “sinful” behaviour and financing the health care system, public authorities are planning to raise the tax load on alcohol and tobacco even higher. This type of policy obviously has its risks for business competitiveness. And more importantly, it causes consumers to act in ways that are just as dangerous to their health, if not more so. It also provides a powerful stimulus for the growth of the parallel market and of smuggling, two phenomena that are just as old as the taxes on these very products. All this suggests that the concept of sin taxes should be applied with caution.