The cigarette tax is not the silver bullet the government makes it out to be. Congress recently proposed raising the federal cigarette tax from 39 cents to $1 per pack to pay for an expansion of the State Children’s Health Insurance Program. That expansion would have increased the enrollment of the program from 6.6 million children to 10 million, but President Bush vetoed the legislation last week. Defending the increased tax, legislators made the ageless argument that it would improve public health by encouraging smokers to quit smoking. But that’s not true: The cigarette tax hurts America’s poor and causes unnecessary governmental influence in personal decision-making.
When the price of cigarettes rises because of a tax, a number of smokers would certainly be dissuaded from buying them. To some, cigarettes are only worth their current price and continuing their habit would be uneconomical if the price of cigarettes increased. But since smoking is an addictive habit and is hard for many to give up, many people would continue buying cigarettes and cut back in other areas of their lives.
It may be easy for the rich to pay the increased price, but less fortunate smokers may have to tighten their belts. A 2002 National Health Interview Survey found that 33 percent of Americans below the poverty level smoke, while only 22 percent of the population at or above the poverty line does. Because a disproportionate number of smokers are below the poverty line, the poor would be hurt most from in increase an the cigarette tax.
A recent report by the Tax Foundation revealed that no other federal tax hurts the lowest 20 percent of households by income more than the cigarette tax. By obtaining the $35 billion needed for the S-CHIP expansion through a cigarette tax increase, the lowest 20 percent of households pay 37 times more than they would be under an income tax increase. The cigarette tax increase leaves little room for those below the poverty line to maneuver. They may be forced to cut down their grocery bills and doctor visits. For those with low incomes, the question of what to cut because of an increased cigarette tax should never have to be faced.
Proponents of increasing the cigarette tax argue that it discourages smoking, but this reasoning could be extended to justify governmental interference in other personal affairs. The surgeon general considers smoking a health hazard, as every packet of cigarettes is required to explicitly state. However, the surgeon general also considers obesity a major health problem. As reported in the San Francisco Chronicle in 2003, then-surgeon general Dr. Richard Carmona “called obesity the fastest growing cause of illness and death in the United States and said it deserved more attention than any other epidemic.” Perhaps the obesity epidemic is enough cause to tax fast food in the same way cigarettes are taxed.
A local fast food tax nearly became a reality in 2005 when Detroit Mayor Kwame Kilpatrick proposed a 2 percent tax on all fast food sold within the city’s borders. A fast food tax would be another ridiculous instance of governmental interference in personal decision-making. Thousands of people each day eat fast food because of its convenience and affordability. Taxing fast food would force many people to avoid it, but it might also stress their lives unnecessarily as they seek less convenient and more expensive sources of food. The decision as to whether or not the convenience of fast food is worth its unhealthy effects is personal, and the government has no right to interfere with it. The decision between the costs and benefits of smoking is personal and should be made without governmental interference.
The federal government and all 50 states use the cigarette tax to raise revenue. The amount of the cigarette tax is constantly raised, because taxing a small minority is easier than taxing the general population. The recent proposal to increase the federal cigarette tax to fund the S-CHIP is a poor decision. The S-CHIP was conceived to assist the less fortunate, but the cigarette tax is the single most hurtful federal tax to the lowest 20 percent of American households by income.
The cigarette tax is not a cure-all. It taxes the poor, coerces personal decisions, and encourages further government intervention in personal affairs. It is time for the cigarette tax to be abolished, not increased.
Patrick Zabawa can be reached at email@example.com