Economics------Smoking and Tax

BUSINESS AND ECONOMICS

——Smoking and Tax

Introduction

In the past decades, an increasing number of countries have published a ban on smoking in public places. Someone agree this government policy of ban smoking which will help the nonsmokers and children keep away from the second hand smoke. However, some cigarette industries don’t accept it. In this essay, I will explain the cigarette and tax relation with some economics words. And connecting with Hazlitt’s book of ‘Economics in One Lesson’ to give the suggestion and recommendation.

Economics in one lesson

In Hazlitt’s book of ‘Economics in One Lesson’, it has discussed the effects of governmental efforts to fix the price of commodities above or below the levels to which free market would otherwise have carried them. In a perfect free market, market price is the equilibrium price which when total demands equal to total supply. Many people, however, believe these fallacies because of man’s nature to see only the “immediate effects of a given policy, or its effects only on a special group (Henry Hazlitt, 2009).” Those people neglect the long-term effects and the implications on other groups by an economic policy. Classical economists only focused on long-term consequences and not the immediate damage incurred by certain groups.

Cigarette and Tax

In the theory of Economic, it assumes that consumers know what the best choice for them. Economists suppose that the most efficient way to allocating society's scarce resources is to allow individuals to make their own consumption choices (such as whether or not to purchase a particular product) within a free, competitive market (Scollo, MM & Winstanley, MH, 2012). According to this economic assumption, if smokers totally and freely addicted tobacco with full information of the health consequences and drugs potential, and if they also accept all the consequences of their choices, then the market is efficient, and there is no justification for government...