Even at relatively high present rates, taxes on cigarettes provide barely 1 percent of state revenues and an even smaller percentage of federal receipts. It is not possible, even if the price was pushed to $10 a pack, to balance the budgets of this nation on the backs of its smokers. Then why do we tax cigarettes?
Well, one reason is that in an earlier age of smaller governments, before the income tax, when it was widely thought that smoking was efficacious if wicked, taxes on tobacco comprised a significant share of government revenue. So, for that matter, did tariffs and duties on imports and taxes on playing cards. But that was an earlier age. Today, most people, if they even think about it, assume we have high tobacco taxes to discourage hard- core smoking. Most evidence indicates that they aren't very effective at doing this.
Sen. Bill Bradley estimates that raising the federal cigarette tax, currently 24 cents a pack, to a dollar will yield $10 billion a year in additional revenues. It is obvious that he is betting that smokers will simply go on puffing away. The government will only have succeeded in increasing the percentage of their disposable income which goes to supporting their addiction, if that is the high public purpose he has in mind.
Smokers already pay about $10 billion in federal and state taxes, precious little of which goes to research on how to help people stop smoking. Addictive smoking is a dreadful health menace in America. Anybody who says otherwise is a moron. But taxing the victims of this menace carries with it some rather uncharitable assumptions.
But what the hell, increasing the cigarette tax is probably a good idea even if it induces only a few people not to smoke. Besides, the cigarette manufacturers have been increasing their prices shamelessly for several years on the successful theory that as cigarette sales flatten and per-capita consumption declines, they can maintain or even increase their profits by selling fewer cigarettes at vastly higher profit margins. They've been taking the smoking addicts of this nation for a ride.
If Mr. Bradley really wanted to make a case for higher cigarette taxes, he would have pointed out that it makes more sense to divert these higher prices to the Treasury than to see them go toward maintaining the profits of cigarette manufacturers and the vast and well-financed influence of the tobacco lobby.
Robert Reno is a columnist for Newsday.