Sin taxes are a big source of revenue for states, which collected more than $32 billion on things like alcohol and tobacco sales in 2014.
But a new report shows that some states raise far more money through sin taxes than others. A new report by HowMuch.net, a cost-information website, found that Pennsylvania generated the most money ($2.73 billion) from sin taxes on alcohol, tobacco and gambling. The Keystone State was among 11 states that raised more than $1 billion in sin taxes.
Two other states crossed the $2 billion mark: New York ($2.65 billion) and Texas ($2.51 billion). Pennsylvania, Texas, and New York collected more than $1 billion each in cigarette taxes alone.
Wyoming was the state with the lowest sin tax revenue, taking in just $26 million on sales of alcohol and tobacco.
Sin taxes are growing in importance as politicians look for ways to raise money without increasing property or income taxes across the board. For example, states have hiked taxes on tobacco products more than 100 times in the past 15 years.
“As states continue to grapple with ever-tightening budgets, it is nearly certain that state legislatures will continue to raise sin taxes,” writes report author Rebecca Lawrence. “Sin taxes are an easy way to increase revenue without running into significant political opposition.”
Critics of sin taxes, however, claim that they do little to deter undesirable behaviors and have a disproportionate impact on lower income consumers.