Sunday, August 18, 2013

PROFITING FROM SIN


Sin!  Just the mere mention of the word conjures up all types of images ranging from a deliciously sinful calorie-laden dessert all the way to the far reaches of the spectrum with the truly unthinkable and/or unacceptable.

But states profiting from sin?  What's that all about?

I came across an article about state income derived from taxes on goods and services that are deemed to be sinful—sin taxes.  The article's definition of 'sinful' is all things related to tobacco, alcohol, and gambling.

Those are the opening three paragraphs from a blog I did over two years ago.  I just came across an updated list citing a new top ten list with revised numbers based on new data from the Census Bureau and the American Gaming Association.  So…I thought it would be a good idea to update my old blog.

Excise taxes on tobacco are the most politically volatile and varied across the country.  For instance, Rhode Island (in the top 10) charges $3.50 in taxes per pack (that's one pack of twenty individual cigarettes, not a carton) of cigarettes while Virginia and Missouri charge less than $.50 per pack.  However, the actual total dollar number in profits quite often depends more on consumption (volume of sales) than percentage of taxes with lower tax percentage states raking in more profit dollars than high tax percentage states.  New York has a whopping $4.35/pack cigarette tax yet the state did not make it into the top 10 list.

Compared to the other sin-related sources of income, taxes on alcohol are not a big source of state revenue.

It seems obvious that gambling is almost always a much more significant source of income than tobacco or alcohol.  Especially when you remember that gambling is more than just casinos, it also includes the state lotteries.

These are the states profiting most from sin.  These figures are from 2011, the most recent year for which there is consistent data available for all income.

10)  Oregon
Total percent of revenue from sin:  3.0%
Most profitable sin:  Gambling (lottery)
Revenue from sin:  $1,552,600,000
Total state revenue:  $34,797,285,000

[my previous blog: #10 was New Jersey with 4.34% from sin and most profitable sin being gambling (lottery)]

9)  South Dakota
Total percent of revenue from sin:  3.3%
Most profitable sin:  Gambling (casinos)
Revenue from sin:  $204,293,000
Total state revenue:  $6,017,179,000

[my previous blog: #9 was New Hampshire with 4.54% from sin and the most profitable sin being tobacco]

8)  Michigan
Total percent of revenue from sin:  3.6%
Most profitable sin:  Gambling (casinos)
Revenue from sin:  $2,292,118,000
Total state revenue:  $64,429,901,000

[my previous blog: #8 was Illinois with 4.55% from sin and the most profitable sin being tobacco]

7)  Pennsylvania
Total percent of revenue from sin:  3.7%
Most profitable sin:  Gambling (casinos)
Revenue from sin:  $3,849,764,000
Total state revenue:  $91,705,305,000

[my previous blog: #7 was Michigan with 4.91% from sin and the most profitable sin being tobacco]

6)  Indiana
Total percent of revenue from sin:  4.0%
Most profitable sin:  Gambling (casinos)
Revenue from sin:  $1,552,600,000
Total state revenue:  $38,894,976,000

[my previous blog: #6 was Pennsylvania with 5.04% from sin and the most profitable sin being gambling (casinos)]

5)  New Hampshire
Total percent of revenue from sin:  4.6%
Most profitable sin:  Tobacco
Revenue from sin:  $393,209,000
Total state revenue:  $8,542,308,000

[my previous blog: #5 was South Dakota with 5.63% from sin and the most profitable sin being gambling (lottery)]

4)  West Virginia
Total percent of revenue from sin:  4.7%
Most profitable sin:  Gambling (lottery)
Revenue from sin:  $729,451,000
Total state revenue:  $15,397,630,000

[my previous blog: #4 was Indiana with 6.11% from sin and the most profitable sin being gambling (casinos)]

3)  Delaware
Total percent of revenue from sin:  5.0%
Most profitable sin:  Gambling (lottery)
Revenue from sin:  $472,054,000
Total state revenue:  $9,349,728,000

[my previous blog:  #3 was Delaware with 7.56% from sin and the most profitable sin being gambling (lottery).  Delaware is one of only three unchanged rankings from my previous blog]

2)  Rhode Island
Total percent of revenue from sin:  5.4%
Most profitable sin:  Gambling (lottery)
Revenue from sin:  $505,305,000
Total state revenue:  $9,388,083,000

[my previous blog:  #2 was Rhode Island with 8.66% from sin and the most profitable sin being gambling (lottery).  Rhode Island is one of the unchanged rankings from my previous blog]

And topping the list, coming as no surprise and also an unchanged ranking from my previous blog:
1)  Nevada
Total percent of revenue from sin:  5.8%
Most profitable sin:  Gambling (casinos)
Revenue from sin:  $1,013,568,000
Total state revenue:  $17,597,124,000

Note:  There wasn't any mention about the amount of tax income from legalized prostitution in specific counties.

[my previous blog, #1 was Nevada with 12.83% from sin and the most profitable sin being gambling (casinos)]

As you can see, the percentage of income in 2011 derived from sin for the top 10 in the most recent survey is down from my previous blog which was based on figures from 2009.  The general consensus from the organizations tracking these numbers is that figures for 2012-2013 (since the 2011 survey) are showing a rise in percentage of income from sin.


4 comments:

Harlie Reader said...

What's more interesting is that is all from gambling. I would have figured it would have been from ciggerettes or liquor.

Marika

Ashantay said...

Interesting that sin taxes hit the people who could be considered either risk takers or addictive personalities the hardest. Thanks for the thoughtful post.

Samantha Gentry said...

Marika: I'm surprised liquor didn't play a larger part in the 'sinful' total.

Samantha Gentry said...

Ashantay: The sin taxes cut across all socio-economic levels, from the occasional glass of wine with dinner or buying a $1 scratcher lottery ticket once a month to the confirmed alcoholic or compulsive gambler.

Thanks for your comment.