Monday, April 20, 2009

Do tobacco taxes unfairly burden poor smokers?

Over 20 states were considering raising taxes on tobacco as of this New York Times article from last month. On April 1, the federal tobacco tax was increased by 61 cents to pay for health insurance for needy children (SCHIP).

smoking packs of cigarettes with health warning smoking can cause a slow and painful deathBut some people complain that raising taxes on smokers burdens the poor, because smoking is more prevalent among the poor than among the general population. (For instance, the argument is made in this video clip, and this blog post argues that it burdens blacks as well as the poor.)

First of all, it doesn't burden "the poor," since most poor people don't smoke. At most, it burdens poor smokers. (29% of Americans living below the poverty line smoke, according to the American Heart Association.)

But that's not accurate either. It burdens them only to the extent they keep smoking.

Is it hypocritical for liberals to support policies that burden that group of people to that extent? Not only don't I think it's not hypocritical; I think it could actually redeem liberals for how welfare and welfare-like programs have harmed the poor.

When you give someone money, you increase the likelihood that the person will buy harmful stuff (cigarettes being one of countless examples). That's true of everyone -- not just poor people, not just smokers.

And since money is fungible, this is true even if you give earmarked benefits like food stamps. If you give someone $X money on the condition that it be spent on such-and-such goods that they would have bought anyway, they'll spend that money on those goods, but they now have $X more to spend on whatever they want. (I'm no economist, but that's my rough calculation -- please correct me if I'm wrong.)

All of this might make me sound like a right-winger who's opposed to welfare on the ground that the poor will just do bad stuff with it. I'm not. But I think that even if you support welfare, you should be aware of its costs. Raising tobacco taxes mitigates one such cost by deterring poor people (along with everyone else) from buying cigarettes.

RELATED: Last year, my mom blogged this new law:

Congress cracks down on flavored cigarettes to show it cares about children ... and has to cut a swath around menthol to show it cares about black people.

Or... wait... is it supposed to show it cares about black people by helping them like smoking less? It's so hard to be a caring congressperson these days!

(Photo of cigarette packs in Italy by Aneta Leavitt.)


Zachary Sire said...

First of all, it doesn't burden "the poor," since most poor people don't smoke.
Really? How do you know? Just wondering. If I were to take a guess, I'd guess that most poor people do smoke.

John Althouse Cohen said...

"the poor are significantly more likely to smoke. Among different incomes, the AHA [American Heart Association] claims, smoking is 'highest among persons living below the poverty level (29.1 percent).' Nearly half of all smokers live below 200 percent of the Federal Poverty Line and thus are the very families SCHIP purports to help."

I'll add this detail to the post.

Anyway, even if most poor people did smoke, that'd be an incidental error that wouldn't affect my overall argument. I could just change "most poor people don't smoke" to "not all poor people smoke."