New cigarette tax lowers smoking rate, revenue

Even though smoking remains one of the worst choices a person can make for their health, the new federal and North Carolina tax increase does little to help address the problem.

At the start of the month, the federal government increased the tax on cigarettes by roughly 60 cents, according to the National Conference of State Legislatures. Lawmakers passed it to raise money for children's health insurance.

The NCSL also reports some of the reasons states want to raise the tax rate include increasing available money and deterring smoking.

While certainly laudable goals, the tax hike doesn't make much sense.

If the purpose of raising taxes is to both deter smokers and to help health programs, then won't one affect the other?

If more smokers quit because of the tax increase, then less money will be available to fund health projects. However, the NCSL states the federal budget will increase by an estimated $33 billion over the next five years with this new tax. Maybe or maybe not.

By targeting smokers, lawmakers obviously want to get what looks like easy money. But the federal government might not be aware of who does the smoking, which affects available tax money.

People with a GED or less education have higher levels of smoking than those with undergraduate degrees or more, according to the Centers for Disease Control and Prevention.

Additionally, more people who smoke live below the poverty line than those above or at the line, according to the CDC.
Because we know more education correlates with higher income levels, the federal tobacco tax really goes after poor people because they make up the largest amount of smokers.

Sure, advocates for the tax increase can argue raising the tobacco tax deters people from smoking, and for some it does. But the advocates fail to see they tax themselves out of money because tax levels will eventually reach a point where no one will smoke. And then where will the money come from?

Advocates need to stop citing health reasons for people to stop smoking as well. One group called the Tax Foundation says anti-smoking groups seek higher taxes to reduce the health hazards of smoking. The foundation says the groups should seek prohibition of cigarettes, not higher taxes, if they really care about harmful effects.

Of course, prohibition will throw tobacco onto the black market which will increase crime. But with nearly half a million people dying each year from smoking, according to the CDC, prohibition might not be a bad thing. But that will never happen. Lawmakers would rather have the money.

And North Carolina would like a piece of the cake, too.

At the beginning of the year, lawmakers put forth a draft to the General Assembly which would increase cigarette tax from 1.75 cents a cigarette to 5.95 cents, or roughly 80 cents a pack, according to the North Carolina General Assembly. If the draft eventually gets submitted as a bill, the combined federal and state taxes will increase the cost of a pack of cigarettes by $1.40.
Additionally, the state recently called for a smoking ban in public places with minors present, according to the N.C. General Assembly. This looks like a logical solution to stop the health concerns of cigarettes, but falls flat on its face.

A ban on public places with minors means a smoking ban in restaurants, as several media outlets recently reported. And with lawmakers protecting minors from smoking, they should also ban the bad foods.

With the obesity rates across the country, it seems a ban of bad food in restaurants will help curb this problem. But with a ban, the state won't see money.

Perhaps that's why we saw lawmakers discussing a tax on soft drinks a few weeks ago in the media. Rather than ban the product or educate people on what happens with too much soda, government would rather get more green out of it.

Lawmakers might also cite personal choice as a reason they can't ban a product. Leave it up to the consumer and let the chips fall where they may. But if consumers get taxed to the point of not being able to afford a product, then they really don't have much of a choice.

This point brings us back to poor people. With the CDC reporting so many less educated people smoking, and less education meaning less money, no reasonable person can deny the government exploits the poor by increasing these taxes.

Lawmakers might also hide behind this tax by calling it a sin tax. If they want to tax sins, they can do a lot more than just single out smokers.

With the current raise in cigarette tax, the federal government wants to raise money for health programs. The Tax Foundation wants to know why smokers should be the focus of the tax.

They question why not tax other things in society as well, while also discussing how programs needing funding shouldn't be supported by one group of people. This point makes sense.

If government uses smokers to fund health programs, specifically children's health insurance, then taxes should be spread out across the board to fund the program.

Government can raise food or clothing taxes or could hold back a little more on paychecks. These broader taxes would be less since they spread out across different areas and more people, as opposed to the one big tax on cigarettes.

The point being, no single tax should discriminate against a group of people. And by heavily taxing cigarettes, the government targets the poor.

Smoking remains a harmful activity, but until some changes come around, people can't deny the exploitation of the government's tax.

Originally published in The Blue Banner, Spring 2009