But surely the alcoholics are taxed way more than people who have an occasional drink because of the sheer volume? If you drink or smoke a lot, the taxes do accumulate into significant amounts annually.
Policymakers should still consider implementing sin taxes if they intend to intervene to change individuals’ behaviour. But they should be aware that the bulk of the damage that smokers, drinkers and the obese do is to themselves, and not to others.
It might be blunt in the economic sense if the taxed behaviour doesn't exhibit clear external costs but in a social context the scheme works great. Using taxation to discourage behaviour is a better way to collect taxes than taxing everyone.
Taxing goods or behaviour that is deemed harmful both brings in the money and also makes a statement. Further, if alcohol taxes bring in 1% of the state budget it means everyone's income is that much lower because of taxing alcohol.
"Sin taxes" are also economically unpredictable because when the collected amounts begin to drop the tax is working as intended. But socially this is exactly why they were used in the first place.