In light of that assumption, let's consider President Obama's 2015 proposed budget which calls for a 94 cent/pack increase in federal cigarette taxes. That tax currently is $1.01/pack, making cigarettes far more expensive than they otherwise would be in the free marketplace. Today, 42% of the cost of a pack of cigarettes is due to federal taxes alone.
The health benefit?
Nearly ZERO. According to an article in the Washington Examiner, researchers at the University of Illinois at Chicago have found that a $1/pack increase in the federal cigarette tax will cut cigarette smoking by <1%. Evidently, cigarettes are so heavily taxed that an increase in taxes doesn't persuade cigarette smokers to kick their nicotine habit.
Worse yet, while liberals decry any tax scheme that's regressive--taxes that extract an equal percentage from all economic strata but take a greater number of disposable income $$$s from those in the lower strata--liberals seem to be unfased by the highly regressive cigarette tax. The facts: Between 2010 and 2011...
- cigarette smokers who earned <$30k/year spent 14.2% of their income on cigarettes;
- cigarette smokers who earned between $30k and $59,999 spent 4.3% of their income on cigarettes; and,
- cigarette smokers who earned $60k spent 2% of their income on cigarettes.
Increasing federal cigarette taxes by $1/pack will cost a cigarette smoker who earns between $20k and $25k nearly $450/year.
Q: What's $450 to someone earning $500k?
A: Peanuts, compared to someone earning $25K.
Isn't that what liberals always categorize as "unfair" and argue that "social justice" requires extracting a greater number of $$$s from those in the higher-income economic strata?
And that's to say nothing about state cigarette taxes. The five states with the highest cigarette taxes are:
- New York ($4.35);
- Massachusetts ($3.51);
- Rhode Island ($3.50);
- Connecticut ($3.40); and,
- Hawaii ($3.20).
Notice anything those states share in common?
When it comes to controlling the behavior of people, it's pretty clear that liberals are very willing to tax the poor disproportionately...for the health, social, and economic benefit of those poor folks.
Liberals earmark those tax revenues for their pet social programs--for example, universal day care and an array of social service entitlements--staffed by their cronies, of course. It's called "crony socialism" and builds the liberal voter base by making all of those cronies dependent upon their their patrons for all of those jobs funded by their "sin" taxes.
What the liberals haven't accounted for in their thought process as it relates to sin taxes--like taxing cigarettes--is that when the desired effect is achieved in response to the liberals' policy, the forecasted revenues won't be collected. Then, the programs those tax revenues were supposed to fund aren't funded.
So, what's to be done? Liberals resort to increasing tax rates again, especially those of the upper strata of income earners, to fund what shouldn't have been funded in the first place. After all, liberals knew those funds wouldn't be generated in the first place.
Taxing behavior is all about social engineering that's constructed upon a host of false assumptions.
Let the discussion begin...
To read the Washington Examiner article, click on the folllowing link:
"Regressive cigarette tax hikes hardly improve health."