[cooldude]

Cigarettes are already the most heavily taxed commodity in the U.S. The federal excise tax is $0.39 a pack and the national average state excise tax is about $0.60 per pack, for a total of $0.99 per pack. In addition, the 1998 Master Settlement Agreement (MSA) increased the price of a pack of cigarettes by about $0.40 a pack. In a growing number of cities, a pack-a-day smoker pays more in cigarette taxes than he or she pays in state income taxes.

Such high and discriminatory taxes on smokers are unfair. They are also an inefficient and unreliable way to raise funds for government. Excise taxes require regular rate increases to keep pace with inflation, whereas income, sales, and property taxes all rise with inflation or economic growth. Because of their narrow bases, excise taxes are unstable revenue generators. And excise taxes require relatively high rates to raise funds. These rates, in turn, create opportunities for evasion and the transfer of economic activity to states with lower taxes.

Dramatic price hikes and extreme taxes on cigarettes are threatening to create a stampede of tax evasion, black-market transactions, counterfeiting, and even use of lethal violence against convenience store clerks and truck drivers. Tax hikes of $1.00 a pack or more, as have been adopted recently by New York, Cook County, Illinois, and elsewhere threaten to take us to a neoprohibitionist era, with all the crime, expenses, and loss of respect for law enforcement that accompanied Prohibition.

Excise taxes are also regressive. People with low incomes not only pay a higher percentage of their incomes on cigarette taxes than do wealthier people, they even pay more in absolute terms. Persons earning less than $10,000 paid an average of $81 a year in tobacco taxes, versus $49 for those who make $50,000 or more. This was before recent massive tax hikes!

[cooldude]

Are high taxes on cigarettes justified by the social costs smokers impose on the rest of society? No.

Harvard Professor Kip Viscusi has repeatedly demonstrated that smokers already pay more in excise taxes than the social costs of their habits. Even before the MSA, “excise taxes on cigarettes equal or exceed the medical care costs associated with smoking.” For example, Illinois’ cigarette taxes, according to Viscusi, were $0.13 more per pack than the social costs of smoking before the settlement added $0.40 to the price of a pack of cigarettes, before the $0.40 a pack tax hike approved by the state legislature in 2002, and before Cook County’s $0.82 a pack boost in 2004.

Instead of raising cigarette taxes, simple justice demands that cigarette taxes be reduced to zero. In fact, states should consider taping a dime or a quarter to every pack of cigarettes as a way of thanking smokers for reducing the burden on taxpayers!

[teslahelper]

The research used to justify government regulation of second-hand smoke has been powerfully challenged by critics, including Congress’s own research bureau. According to the EPA, the risk ratio for forty years of exposure to a pack-a-day smoker is just 1.19. Epidemiologists as a rule are skeptical of any relative risks lower than 3 and dismiss as random ratios less than 1.3. Science writer Michael Fumento and others have documented how the threat of secondhand smoke has been greatly exaggerated.

The latest word on second-smoke appeared in the May 12, 2003 issue of the British Medical Journal. Two epidemiologists, James Enstrom at UCLA and Geoffrey Kabat at the State University of New York at Stony Brook, analyzed data collected by the American Cancer Society from more than 100,000 Californians from 1959 through 1997.

“The results do not support a causal relation between environmental tobacco smoke and tobacco related mortality,” the researchers wrote, although they do not rule out a small effect. “The association between tobacco smoke and coronary heart disease and lung cancer may be considerably weaker than generally believed.”

“It is generally considered that exposure to environmental tobacco smoke is roughly equivalent to smoking one cigarette per day,” according to Enstrom and Kabat. “If so, a small increase in lung cancer is possible, but the commonly reported 30 percent increase in heart disease risk--the purported cause of almost all the deaths attributed to secondhand smoke--is highly implausible.”