Taxes Affect Behavior?

http://www.usatoday.com/news/health/2009-03-27-tobacco-tax_N.htm?csp=34

When we hear talk about raising corporate taxes the two sides always argue over whether those taxes will impact job loss or corporate behavior. I always hear the liberal side say that corporations need to "pay their fair share". But we all know that corporations don't pay taxes, they pass the cost on to consumers or change their behavior to avoid the tax altogether.

For all the posturing about taxes not impacting behavior when it's corporations in the crosshairs, when it's a sin tax, behavior is always touted as one reason to pass the tax.

Here we see the continuation of sin tax being used to fund good things. It's a win-win because it reduces bad behavior and funds good programs. The problem is that these good programs will be in trouble if the behavior actually decreases in the future.

Either way I see the liberal argument losing. If the behavior reduces then it proves that taxes on a good or service reduces the demand for that good or service. If behavior doesn't change then one of the primary reasons for passing a sin tax is proved wrong.