Cigarette Tax in America

Channel Four News Team| Effects of tail Tax In America| Cig arette Tax| | Justin Hochstetler, Rachel Krug, Robbie Mostek, Randi Westervelt| 12/5/2011| | Cigarette Consumption What are the economic impacts of cigarette taxes on producers, rustrs, and governing body in the United States? The motivation of the study is to let out out whether cigarette taxes really reduce consumption. If they dont, what are the possible alternative solutions to decrease consumption? Lastly, we want to recover a way to decrease consumption in consecrate to increase productivity and wellness. The Grossman model of wellness is a study portion of the health economics field. Michael Grossman formulated his model of health production in 1972 and his model has been used in health economics ever since. Grossmans model depicts health as both consumable keen and an investment good. People consume health through personal satisfaction and economic utility. By investing in health, consumers gain increased satisfaction receivable to larger productivity, fewer sick days, and higher wages. However, investing in health is costly due to the amount of time and some other resources devoted that are necessary to maintain good health.

In Grossmans model, the equilibrium point of health investments come when the peripheral cost of health capital equals the marginal benefits of health capital. Furthermore, Grossmans model shows that once an adequate level of investment in health is reached, reaching an even higher level is hard-fought regardless of the amount of time and other resources allocated to health investments. The government taxes consumption because it is a negative externality. It is a public good that is normally over consumed so the government regulates those goods to control it. Overall, cigarettes decrease the amount of time spent in full health relating to the Grossman model and is not as productive. The government raises revenue on these taxes and in 2010 it was 16.5 billion... If you want to get a full essay, tell apart it on our website: Orderessay

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