Sin taxes are suffering from a shortage of sinners

P ity the California taxman. The state has a yawning budget deficit, which politicians are attempting to narrow. Local laws make it difficult to raise taxes, requiring a two-thirds majority. Worse, once-reliable sources of funds are running dry. Fuel-tax revenues are forecast to fall sharply as drivers switch to electric vehicles. Revenues from cigarette taxes have fallen by $500m, or 29%, since 2017; now those from alcohol taxes are dropping, too. This is a concern: at present, revenues from the trio of taxes amount to nearly half of what the state spends on higher education.

The territory sits on an astounding number of critical minerals

A tax windfall has added to already overflowing coffers

The ultra-gloomy picture painted by politicians is no longer accurate

The country’s economy is broken. A recovery requires a healthier property market

Treasury yields are rising ominously

The continent’s policymakers are too relaxed about the risks

https://www.economist.com/finance-and-economics/2024/10/31/sin-taxes-are-suffering-from-a-shortage-of-sinners

A source: www.economist.com/finance-and-economics/2024/10/31/sin-taxes-are-suffering-from-a-shortage-of-sinners