Why taxing smokers is NOT the fairest, or even the best, way to balance a state’s budget

Though sticking up for smokers is about as popular as sticking up for lepers*, the Nonprofiteer wishes to  register her opposition to Illinois’s scheme for balancing the state budget by adding 75 cents to the tax on a pack of cigarettes.  Her objections are twofold:

  • Yes, of course, we want people to give up smoking, for their own sake and for the sake of the public environment.  But if we were really serious about interfering with activities that damage public health, we’d be raising the tax on alcohol even more precipitously.  Drinking is implicated in a huge percentage of hospital admissions, and not just for cirrhosis or hepatitis.  There are the injuries from drunk driving and the sexually transmitted diseases caused by risky behavior of the sort in which intoxicated people specialize, not to mention virtually every injury from violent crime.  So let’s take a little break from anti-smoking smugness, shall we?  You know the kind: it involves coughing when a character lights a cigarette on stage, or even in the movies.  Instead, let’s try paying attention to the other, even more major source of injury–especially as tobacco hurts its users first and others only incidentally, while alcohol is often the other way around.  (As the comedian Jimmy Tingle has pointed out, "There aren’t too many kids cowering in doorways, saying ‘Oh, no, here comes Dad–he’s been out smoking all night!’")  Liquor taxes have barely risen over the past 50 years–and if you think that has something to do with campaign contributions by brewers and vintners and distillers, go to the head of the class.  Yet every time anyone points out the public costs of keeping alcohol taxes low, we hear the same tired prating about the failure of Prohibition, and see the same crocodile tears about how alcohol taxation will hurt the poor most.  Listen: Prohibition had a number of terrible externalities, but it actually did reduce drinking.  And reducing drinking would be a good thing, especially among the poor.  As an old Crown Royal ad had it, "If price matters, you’re drinking too much."  So let’s acknowledge that drinking is a costly social activity–even more than smoking–and either tax both of them into oblivion or leave smokers the hell alone.
  • More relevant to the subject of this blog**, the idea that it’s better to tax small groups of people for the costs they impose on society rather than tax the whole society for services everybody needs, albeit in differing amounts, is a pernicious one.  There’s a straight line from that idea to the notion that somehow charity can make up for a lack of public support for the poor, uneducated or ill–and a very short step from there to the abolition of the entire public sector.  After all, if people should be punished by special taxation for inflicting public health costs on the rest of us, why shouldn’t people be punished by special taxation for inflicting the costs of public education on the rest of us?  Or for requiring police services?–after all, the wealthy among us pay for their own security.  And so on.  And soon we decide that poor people should bear the burden of their own poverty because, after all, most people manage not to be poor.  That way lies the workhouse and debtors’ prison–and if those strike you as a good idea you haven’t read A Christmas Carol recently.

This situation (created by the Illinois Governor’s failure of leadership, flawlessly imitated by his legislative counterparts) is the inevitable consequence of an utter unwillingness to tell the truth, namely, that balancing the state’s budget and providing services requires an increase in the income tax.  Nothing but that sort of progressive and society-wide allocation of burdens indicates with any degree of seriousness that we regard ourselves as a single society, albeit one with multiple needs, rather than a series of Balkan states just waiting to erupt into internecine war.
————-
*Something we all should be doing, by the way, rather than staying silent in the face of Lou Dobbs’s disgraceful claim that undocumented immigrants are creating a leprosy
epidemic
.  The implication that immigrants’ very presence–or that of lepers, for that matter–on our soil puts
us all at risk of the disease is arrant nonsense.  Hansen’s disease is not thought to spread through casual contact and is curable by antibiotics.  This is not, after all, the 14th Century despite
the resemblance of Dobbs’s attitudes and beliefs to those prevalent in medieval
Europe.

**A rigorous account of the comparative costs and benefits of regulating alcohol and cigarettes can be found here instead.   

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