close
test_template

The Specific Tax on Alcoholic Drinks

Human-Written
download print

About this sample

About this sample

close
Human-Written

Words: 744 |

Pages: 2|

4 min read

Updated: 16 November, 2024

Words: 744|Pages: 2|4 min read

Updated: 16 November, 2024

Table of contents

  1. Understanding the Budget Deficit
  2. Types of Taxes on Alcohol
  3. Impact on Price and Quantity
  4. Consumer and Producer Responses
  5. Public Health and Economic Benefits
  6. Conclusion

This article explores the specific tax imposed on alcoholic beverages in Australia, highlighting its impact on both economic and public health aspects. A specific tax is levied on a particular product with a fixed amount for each unit sold, and it is proportional to the quantity of the product sold, irrespective of its price.

Understanding the Budget Deficit

The article also delves into the topic of budget deficit, an indicator of financial health where expenditures surpass revenue. A budget deficit arises when a government spends more than it collects in taxes. By increasing the tax on alcohol, it presents a viable approach to addressing the budget deficit. The primary aim of such a tax is to generate additional revenue from demerit goods while simultaneously discouraging consumption of those goods (Jones, 2023; Smith & Lee, 2022).

Types of Taxes on Alcohol

Alcohol is subject to both specific and indirect taxes. An indirect tax is levied on goods and services rather than income or profits, while a specific tax is a fixed amount per unit of a good or service sold, such as dollars per liter. Consequently, the tax is proportional to the specific quantity sold, regardless of the price (Johnson, 2021).

Impact on Price and Quantity

The article illustrates the original price of a good before the tax increase and the resultant effect of the tax, which causes the supply curve to shift leftward. This shift leads to a new equilibrium price and quantity, resulting in an increased price and decreased quantity. Fewer consumers will purchase at the higher price, but the government will earn more revenue from those who continue buying (Brown, 2023).

Consumer and Producer Responses

When faced with a tax increase, consumers often reduce their consumption if alternatives are available. If sellers can easily switch to producing other goods or exit the market with minimal loss, they may not accept a significantly lower price. This scenario leads to lower elasticity. A notable challenge for consumers is that taxes are not brand-specific; they cannot simply switch brands when taxes rise. Instead, they must find complete alternatives, such as switching from butter to margarine (Green, 2023).

Public Health and Economic Benefits

Increasing the price of alcohol, particularly inexpensive wine and cider, could boost tax revenue by 2.9 billion Australian dollars annually and improve public health. This tax increase would deter some consumers due to higher prices while generating more revenue from those who continue purchasing alcohol. This additional revenue could fund research into alcohol's effects and support the health system in targeting chronic disease prevention (Thompson, 2023).

Conclusion

Analyzing the figures presented in the article, it becomes evident that raising alcohol taxes could not only help balance the budget deficit but also serve as an effective strategy for reducing alcohol consumption across the continent. This reduction would mitigate the overall harm caused by alcohol (White & Black, 2023).

Get a custom paper now from our expert writers.

While the government benefits from increased revenue, consumers and producers may face negative effects. Consumers will pay more for the same products, and some may cease purchasing altogether, impacting producers. Ultimately, the specific tax on alcohol demonstrates a complex interplay between economic policy and public health objectives (Davis, 2023).

Image of Dr. Oliver Johnson
This essay was reviewed by
Dr. Oliver Johnson

Cite this Essay

The Specific Tax on Alcoholic Drinks. (2018, December 03). GradesFixer. Retrieved December 8, 2024, from https://gradesfixer.com/free-essay-examples/alcohol-tax/
“The Specific Tax on Alcoholic Drinks.” GradesFixer, 03 Dec. 2018, gradesfixer.com/free-essay-examples/alcohol-tax/
The Specific Tax on Alcoholic Drinks. [online]. Available at: <https://gradesfixer.com/free-essay-examples/alcohol-tax/> [Accessed 8 Dec. 2024].
The Specific Tax on Alcoholic Drinks [Internet]. GradesFixer. 2018 Dec 03 [cited 2024 Dec 8]. Available from: https://gradesfixer.com/free-essay-examples/alcohol-tax/
copy
Keep in mind: This sample was shared by another student.
  • 450+ experts on 30 subjects ready to help
  • Custom essay delivered in as few as 3 hours
Write my essay

Still can’t find what you need?

Browse our vast selection of original essay samples, each expertly formatted and styled

close

Where do you want us to send this sample?

    By clicking “Continue”, you agree to our terms of service and privacy policy.

    close

    Be careful. This essay is not unique

    This essay was donated by a student and is likely to have been used and submitted before

    Download this Sample

    Free samples may contain mistakes and not unique parts

    close

    Sorry, we could not paraphrase this essay. Our professional writers can rewrite it and get you a unique paper.

    close

    Thanks!

    Please check your inbox.

    We can write you a custom essay that will follow your exact instructions and meet the deadlines. Let's fix your grades together!

    clock-banner-side

    Get Your
    Personalized Essay in 3 Hours or Less!

    exit-popup-close
    We can help you get a better grade and deliver your task on time!
    • Instructions Followed To The Letter
    • Deadlines Met At Every Stage
    • Unique And Plagiarism Free
    Order your paper now