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NICOTINE ADDICTION - A FISCAL LIFESTYLE

March 19, 2007

Governor Culver signed the new $1 per pack cigarette tax increase last week. Now the legislature will set to work on spending the new fiscal windfall.

This is the second big step to align the interest of Iowa's government with that of the tobacco industry; the first step was the multistate tobacco lawsuit settlement. Both the tobacco companies and the legislature will enjoy more revenue from more smokers. The Tax Policy Blog has a nice discussion of the issues: "Tax Cigarettes to Save Lives, But Not Too Many Lives."

It's a common occurrence for politicians like Culver to say that we are saving lives by raising cigarette taxes. But we could save lives by passing many different tax hikes. How about taxes on unhealthy cheeseburgers? Sound ridiculous? Just wait - they're coming, and their advocates are using the exact same argument used by Culver.

Well, the Governor may have his own reasons to restrict cheeseburgers...

On the other hand, by the governor's argument, why doesn't he just ban cigarettes? If smoking is so deadly and it's somehow morally right for government to stop people from killing themselves, then why not save 100,000 Iowans instead of 20,000? Oh...that's right --- tax revenue. He wants to make those who continue to smoke pay more to fund programs that, for the most part, have nothing to do with smoking. It's an easy political sell to impose taxes on smokers rather than raise taxes on everyone.

As we've said time and time again, there is absolutely no justification for imposing additional taxes on smokers solely for the purposes of raising additional revenue to fund general programs. If there is a true negative externality from smoking, then the tax should be imposed for that reason only -- no more or no less.

If a private company made so much money off of cigarettes, nobody would trust it to fight smoking. Yet it's taken for granted that the government can have a lucrative stake in cigarette revenues and still lead the war on smoking. Go figure.

 • Eye on the Legislature: 2007       Bookmark: del.icio.us • Digg • reddit