http://pokedandprodded.health.com/2008/11/16/why-cigarettes-should-cost-10-a-pack/
As the U.S. government throws tax money on the banking bonfire, you have to wonder how many billion-dollar notes are left in the Washington ATM machine for health-care reform. If an income-tax hike isn’t in the cards for 95% of Americans, there will surely be a revenue hunt elsewhere.
The last time a president was looking for major health-reform dollars, it was Bill Clinton, and he targeted tobacco. The reform didn’t happen, but federal, state, and municipal taxes on cigarettes soared from about 52 cents a pack in 1994 to $2.22 per pack in 2007.
Despite that rise, tobacco tax revenue falls far short of the health-care bill associated with tobacco-related disease.
Why pick on tobacco even more?
According to data from R.J. Reynolds, total tobacco taxes in 2007 were $22.4 billion. The company is outraged about that, but consider this November 13 statement from the Centers for Disease Control and Prevention (CDC): “Smoking in the United States causes 443,000 deaths annually and costs $193 billion.â€
Now 443,000 is one of those hideous death counts that numbs the mind. But I’m betting we’re all a bit better these days at processing numbers like $193 billion. And if that’s what smokers are costing the economy, shouldn’t they—so to speak—help bail out health care?
Here are the laudable things about a new health-costs tobacco levy.
* It wouldn’t tax people for something they depend upon for their lives or livelihoods.
* Although not every smoker gets sick, and it can take several decades for sickness to set in, the tax can reasonably be thought of as a health-insurance policy for high-risk addicts, rather than a scattershot “sin tax.â€
* There’s evidence that higher cigarette costs drive down consumption (as happens with alcohol), which may be why the tobacco companies rail against hiking taxes. (The only real news in the CDC report was that there was a healthy one-point drop in American smoking rates between 2006 and 2007, from 20.8% to 19.8%, but the government’s goal to drop rates to 12% by 2010 is doomed.)
The objections are many
First, why should smokers be targeted more than heavy drinkers, overeaters, and motorcycle riders in numskull states like Colorado that don’t require helmets? Second, a fat, flat tax discriminates against the poor, who are more likely to have lousy health care already and spend a disproportionate amount of their income on a tobacco habit. Third, onerous tax hikes encourage tobacco smuggling, illegal Internet sales, and other tax-avoidance behavior.
All fair points. It’s hard to support a rise in the tobacco tax without targeting booze as well. But do these objections outweigh the urgent need for money to reform health care?
We’ll see if president-elect Barack Obama takes the Clinton lead; it would do him no political good in North Carolina. But the smoking challenge highlights the enormous financial implications that result when people make themselves sick in one of the costliest healthcare systems in the world.
Related Links:
How Much Money Are You Spending on Cigarettes?
97 Reasons to Quit Smoking
As Wall Street Burns, Smokers Light Up
___
Yes, I quit smoking two weeks ago cold turkey. No patches, gums, etc. I yam in zealot phase, appease me.
As the U.S. government throws tax money on the banking bonfire, you have to wonder how many billion-dollar notes are left in the Washington ATM machine for health-care reform. If an income-tax hike isn’t in the cards for 95% of Americans, there will surely be a revenue hunt elsewhere.
The last time a president was looking for major health-reform dollars, it was Bill Clinton, and he targeted tobacco. The reform didn’t happen, but federal, state, and municipal taxes on cigarettes soared from about 52 cents a pack in 1994 to $2.22 per pack in 2007.
Despite that rise, tobacco tax revenue falls far short of the health-care bill associated with tobacco-related disease.
Why pick on tobacco even more?
According to data from R.J. Reynolds, total tobacco taxes in 2007 were $22.4 billion. The company is outraged about that, but consider this November 13 statement from the Centers for Disease Control and Prevention (CDC): “Smoking in the United States causes 443,000 deaths annually and costs $193 billion.â€
Now 443,000 is one of those hideous death counts that numbs the mind. But I’m betting we’re all a bit better these days at processing numbers like $193 billion. And if that’s what smokers are costing the economy, shouldn’t they—so to speak—help bail out health care?
Here are the laudable things about a new health-costs tobacco levy.
* It wouldn’t tax people for something they depend upon for their lives or livelihoods.
* Although not every smoker gets sick, and it can take several decades for sickness to set in, the tax can reasonably be thought of as a health-insurance policy for high-risk addicts, rather than a scattershot “sin tax.â€
* There’s evidence that higher cigarette costs drive down consumption (as happens with alcohol), which may be why the tobacco companies rail against hiking taxes. (The only real news in the CDC report was that there was a healthy one-point drop in American smoking rates between 2006 and 2007, from 20.8% to 19.8%, but the government’s goal to drop rates to 12% by 2010 is doomed.)
The objections are many
First, why should smokers be targeted more than heavy drinkers, overeaters, and motorcycle riders in numskull states like Colorado that don’t require helmets? Second, a fat, flat tax discriminates against the poor, who are more likely to have lousy health care already and spend a disproportionate amount of their income on a tobacco habit. Third, onerous tax hikes encourage tobacco smuggling, illegal Internet sales, and other tax-avoidance behavior.
All fair points. It’s hard to support a rise in the tobacco tax without targeting booze as well. But do these objections outweigh the urgent need for money to reform health care?
We’ll see if president-elect Barack Obama takes the Clinton lead; it would do him no political good in North Carolina. But the smoking challenge highlights the enormous financial implications that result when people make themselves sick in one of the costliest healthcare systems in the world.
Related Links:
How Much Money Are You Spending on Cigarettes?
97 Reasons to Quit Smoking
As Wall Street Burns, Smokers Light Up
___
Yes, I quit smoking two weeks ago cold turkey. No patches, gums, etc. I yam in zealot phase, appease me.
