The American Spectator

Political Hay

Is there anything easier for a politician than raising cigarette taxes? Perhaps condemning terrorism -- but that doesn't fill up the coffers. Facing tough fiscal times, twenty-two states are now considering taking the easy way out of their massive budget shortfalls by taking more money out of smokers' pockets with every pack of cigarettes.

In states like Oregon (considering a 50-cent increase) and New Hampshire (considering a $1 increase), politicians are performing the relatively simple political calculus of cigarette taxation and realizing that there is practically no downside to picking on the differently-tobaccoed.

Observe: A minority of citizens who smoke + a majority who believe smoking is a Very Bad Thing + a budget shortfall that could force cuts in popular programs = tax 'em 'till they bleed. Adjust any of these variables (e.g. how many smokers there are in your state, how strapped your state is financially) and you can determine just how much to raise taxes.

For instance, New York's new mayor Michael Bloomberg (motto: Please Leave a Message After the Beep) ran this equation for the Big Apple (huge anti-smoking sentiment, humongous budget shortfall) and came up with the astonishing solution that he should propose raising the cigarette tax in the city by $1.42 -- bringing it up to $1.50. Now, maybe Mayor Bloomberg forgot to carry a one or something, but that would bring the average price of a pack of cancer sticks in the City That Never Sleeps to almost $7 (remembering there is also a state cigarette tax).

Is there any end to this upward spiral? The federal government and the states already make more on a pack of cigarettes than Big Tobacco (maybe that should be Uncle Sam's new nickname). Do they want to double their take? Triple it?

Though admittedly there is no political coalition likely to stand up against cigarette taxes successfully -- and woe-betide the politician who tries to roll back an existing cigarette tax ("You want to kill children!") -- the taxes are clearly unfair and hypocritical, and that should at least be recognized as such.

All of the rationales regularly offered for cigarette taxes are clearly bunk. First of all, it's often argued that smokers cost the state (and thus the taxpayers) money because they require more medical care than non-smokers. Though tobacco companies aren't likely to make this argument publicly, it is widely acknowledged in budgetary circles that this claim is untrue since smokers die earlier, meaning they cost far less in Social Security payments and end-of-life care. It ain't pretty, but facts are facts, and smokers ultimately don't cost non-smokers a cent.

It's also often claimed that people will smoke less if it costs more, which is supposed to be good for the smokers (or future-former-smokers) in question. Aside from the blatant paternalism involved in this way of thinking, it also represents fairly flawed logic. First of all, it's often claimed that kids will be most affected by the price increases since they haven't been hooked as long, and since they have less money. However, since kids usually smoke for social reasons, how likely is it that they will risk social acceptance over 5-cents per cigarette?

More perversely for adults, those "helped" the most will pay the least while those who are stubbornly addicted (remember all that talk of cigarettes being addictive?) will pay through the nose. How fair is it to jack up prices on poor souls caught in the vice-like grip of that demon, nicotine addiction?

The contradictions aren't lost on state or national politicians, but don't expect them to change tactics. The fact that the poor are hurt disproportionately is unlikely to change the minds of always tax-hungry Democrats; and Republicans, like Connecticut's Gov. John Rowland (proposed a 61-cent increase), aren't going to have the courage to stand up for smokers' rights in a fiscal crunch.

In New York, however, the seeds of discontent perhaps are being sown. Facing down the out-of-control increase proposed by Mayor Bloomberg will be a coalition of thousands of bodega and convenience store owners. Will small businessmen such as these, who get hurt when cigarette buying customers frequent their stores less, be able to fight off the onslaught? Probably not. But maybe they can keep Gotham cigarettes under $10 a pack for a while.

In the meantime, hedging against the day that opposition to cigarette taxes stiffens, politicians will be hard at work for the American taxpayer -- looking for some way to tax terrorism.

topics:
Taxes, Business, Social Security, Law