Tobacco taxes in perspective

So a legislative body is proposing yet another increase in the tobacco tax. Some say it’s been a while, some say it’s below the national and/or regional average, some say it to discourage youth smoking. Here’s some useful facts you can use to argue against it.

How much tax we actually pay, and it is way more than enough!

Aside from state and federal tax (federal tax is currently $1.01), do you realize that roughly half the retail cost on a pack of cigarettes is also a tax. Back in 1999, after the major tobacco companies agreed to a settlement with the states (you remember the famed Master Settlement Agreement, MSA), the price of pack or carton of cigarettes nearly doubled. This increase is the money collected by the tobacco companies and transferred right to the state governments in the form of annual payments. Anyone who tells you that the tax on cigarettes is only x amount via state excise, they are either sadly misinformed or lying - around half of what you pay for a pack or carton of cigarettes is tax, from sales, excise AND the settlement agreement.

It is important to note that no other legal product in the world is wholly “taxed” at such an excessive rate per manufacture value as cigarettes - not even the “luxury” items, such as yachts.


The sheer cost to the Economy and Families

Many correctly point out the sheer lunacy of the paradoxical justifications of raising tobacco taxes to both fund government functions and encourage people to quit - if people quit, how will the government be funded? (By raising other taxes to make up for the shortfall, of course).

What some fail to readily recognize, however, is the cost such increases have on the economy and families. Consider this: A father (or mother) who smokes finds his cigarettes suddenly 1 dollar more expensive from increased taxes. If he smokes four cartons per month, his cost for cigarettes is now $40.00 more per month. Aside from more expense to him, what does this mean?

  1. $40 dollars is now NO LONGER going into the economy - it is going directly into government coffers. Where before it might have been used to buy other things - and stimulate the economy - it now no longer buys anything (or is saved, or used to pay debt).

  1. $40 dollars is now NO LONGER spent to benefit his family. His family suffers thanks to an unnecessary and politically motivated governmental taking.

For the Children?

One of the favorite claims by tax proponents is that raising the cigarette tax will discourage youth smoking. Right. Just a few ways to count the absurdity of this claim:

  1. Kids will spend tens to hundreds of dollars on music, games, bling, sneakers, ect. But a per pack increase from a few cents to a few dollars is supposed to stop them?

  1. If raising a tax is so important to keep kids from using something, how come they don’t do this with beer and booze?

And speaking of alcohol, what do they do to try and keep kids from using? Steep penalties for adults who provide and stores that sell. Why, prey tell, do not those so concerned about underage smoking propose jail time for anyone giving kids tobacco? Oh, yeah - that doesn’t punish innocent adults for buying tobacco for themselves.

Health Costs from smoking?

Some love to argue that smokers cost businesses and government more money because of health costs. If this were true, businesses would have refused jobs to smokers twenty years ago, before it was politically correct - and it would have been worth, financially, any legal action.

Hell, I don’t even actually need to make an argument. Places, like North Miami, Florida, which was one of the first towns to ban smokers as employees, have long since scrapped smoker-bans for two reasons 1) It served to hurt recruitment and 2) They realized no financial benefit from the policy.

And, ironically, a study has been published showing exactly the fallacy of this argument - though it has, unsurprisingly, received little in media attention.

Then, of course, there is the fact that many smokers actually live to very old ages (many of the worlds centenarians - folks who lived past 100 - are or were long-time smokers) or the fact that if there was a higher cost to the system from smokers, that has been paid many times over by the magnitude of taxes and MSA funds paid by smokers.

But, honestly, aside from the fallacy of this argument, do you wish there to be a public policy in place that severely limits or bans ANY of our legal freedoms in the name of public cost savings, real or imagined? This is an aspect of socialized medicine. This is the beginnings of totalitarianism.

And perhaps the stupidest argument....

A higher tax discourages smuggling from one state to others. Uh, funny how those supposedly concerned with smuggling can’t even consider the fact that lower excise taxes among all states would discourage smuggling all around. A high tax here would simply encourage smuggling from elsewhere, which would be a loss in revenue. A high tax everywhere will encourage “illegal drug” style smuggling and crime.

Tennessee enacted a steeply higher cigarette tax and as a result that state has had to resort to border patrols and sting operations to discourage Tennessee citizens from buying cigarettes across the border in surrounding states - because of steep loses in tax revenue. The police have had to have their critical duties curtailed to keep people from crossing the border to buy cigarettes that are cheaper - is there really anything good that comes from this?


What it is really all about

Many, including media editors, are actually being flat out honest in their support of higher tobacco taxes: They are saying straight out that their support is because they hate smoking and want to force adults to quit - prohibition by expense. This climate of hate and intolerance exists now because many of you do not express outrage - it is time to start.