Our View: Taxing cigs won't cure a thing

 

Our View: Taxing cigs won't cure a thing

 

Date: May 7, 2009
by: The Observer Staff

 
 

America’s do-gooders love to bash and villify the smokers.

No smoking at the beach. No smoking in the office. No smoking in restaurants. No smoking on airplanes.
And we love to tax them to death, no double-entendre intended.

The feds slap a $1.01 tax per pack. On average, states pile on another $1.34 in taxes per pack. And now it looks like the Legislature is going to get out of the bottom tier of low-taxing cigarette states by raising our cigarette tax from 33 cents to $1.33 cents a pack.

To be sure, there’s a lot of cheering going on. Tax the smokers!

Blithely, lawmakers think this is going to raise $800 million a year in new taxes to feed their own spending addiction — to narrow the gap between state spending and income.

They, of course, appear to be ignoring what is economically logical: That when you increase the price, you reduce demand and the taxes collected.

What’s more, this tax is being imposed on those who can least afford it during an economic recession. It’s a tax on the poor and middle class. Dumb idea in a recession.

There’s an allegedly noble justification for the tax, however. Our paternal/maternal lawmakers believe this higher tax also will bring a public health benefit. Smokers will smoke fewer cigs or quit, thus reducing society’s future health-care costs to care for the smokers with cancer.

So let’s recap: We tax the cigarette smoker, who in most instances is poor or middle class. When we raise the cigarette tax, we take more of that poor person’s money, making him even poorer, and we redistribute it to some government program or, in some instances, to help pay for the health care of other poor people.

The smoker keeps smoking. He plods through life. He has no health insurance. He gets cancer. He is treated at a public hospital. The hospital writes off as uncollected losses thousands of dollars of his costs that are not covered by Medicaid. This raises the hospital’s prices and the cost of health care for those who pay.

In other words, those who don’t smoke, pay for the health care for those who do.

Truly perverse and backward.

Try this instead: What if the burden of behavior were shifted to be borne by the person encating the behavior — and not the taxpayer?

For instance, if you smoke, you will receive no public health care, or at least you will be limited severely to rationed health care. Insurers already do this: If you act wrecklessly, you pay high premiums, or you get no insurance at all.

In other words, in the if-you-smoke scenario, you pay the ultimate price for bad behavior.

It’s kind of like murder. If you shoot someone in cold blood, you will hang. If you want to engage in smoking, auto racing, skydiving, shark diving, alligator wrestling, you pay the price.

Who would win and who would lose if smokers had no public, health-care safety net?

Winners:
The poor smoker. Educated on his likely fate, he would be much more likely to be healthy, more productive and therefore wealthier, less of a burden on family and society.
The insured. The cost of their health care would fall because they are not subsidizing the smokers.
The hospitals. They will write off less uncollectible debts, making them more profitable to reinvest in new cures and procedures.
Families: Fewer cancer deaths, fewer smokers, fewer kids growing up sick from second-hand smoke and becoming future smokers.
Losers:
Tobacco growers and sellers. But they will abandon an unprofitable crop and product for one that is more profitable and in higher demand (another societal win).
Governments. They will lose a source of revenue that feeds their own incurable addiction — spending.
 

SHARE
Login Register now

Currently 0 Responses

Login below to post a comment or click register.
Account E-Mail
Password
forgot password? click here
Speak Your Mind Below!

Classifieds

YourObserver
Subscribe to our eNewsletters
1970 Main Street, Sarasota, FL 34236 941-366-3468

Copyright 2014 The Observer Group Inc., All Rights Reserved