Home > taxes > #046 — “Sin” Taxes: Congress Raises Taxes on Tobacco

#046 — “Sin” Taxes: Congress Raises Taxes on Tobacco

April 17th, 2009

“Don’t Drink, Smoke, or Chew…

At the beginning of this month, the largest tobacco tax increase in history came into effect.  The Federal tax on a pack of cigarettes increased from 39 cents/pack to $1.01/pack.  Strategy involved is at least two-fold.  Idealists believe from a health perspective, the increased taxes on tobacco is enough to force people to quit smoking, while the more cynical say it’s just a ploy to generate government revenue, particularly from the middle & lower class, where percentage-wise, it will hurt their pocketbooks greater.

…Or Associate With Those Who Do.”

This is a tough one for me.  I can’t stand smoking; moreso cigarettes than cigars, hookah, or smokeless tobacco.  I hate when I’m forced to breathe toxic air because of someone else’s habit.  I also hate having to spend money on dry cleaning because my clothes get cigarette smoke ingrained in them anytime you go to a restaurant.

But I also hate taxes.  However, government has a clear history of promoting public policy by dangling purse strings.  To the citizenry they promote charitable causes, home buying, education, and parenting by providing tax breaks.  To the states they offer matching federal dollars to build highways and infrastructure.

The difference with smoking, however, is that instead of a passive tax break, this is an active taxing of the citizenry’s actions.  There IS a difference between encouraging behavior by providing tax relief, and manipulating behavior by forcing your hand with a tax.  But here, it’s a bad habit that most don’t care about anymore; and since it doesn’t affect them, they’re all for it.  I guess it comes down to whether you’re an Idealist or a Cynic on this issue.

Twitterverse

Here’s some comments I got on this topic from my Twitter buddies:

  • @MoneyEnergy – an increased tobacco tax is a good thing in the long run – it’s only painful in the present for a select few… my 2 cents.
  • @VictorB123 – I think tobacco is the modern “tea”. People should start growing their own and avoiding the tax if they use it.
  • @gregzimmerman – ridiculous money grab!
  • @PerryNunley – I quit smoking about 1 year ago cuz sin taxes are stupid (so is smoking).
  • @photog357 – Utterly asinine. It’s nanny state tactic, & illogical in that revenue goes to counteract activity they want money from.
  • @The_Weakonomist – I decided to be OK with it. They do risk an underground tobacco uprising. Moonshine? No. Brownburn!
  • @blockss – Well, it’s quite interesting that the Federal Gov’t will need to recruit ~20 million more smokers in order to pay for SCHIP [the name of the tobacco tax legislation].
  • @ManVsDebt – I hate smoking, but think this could be a slippery slope… How long until Fat Tax? Hmmm maybe I’d shed some pounds…
  • @MoneyEnergy – but if more tax is necessary, shouldn’t it be on smtg we want to discourage (based on obj. evidence)?  It’s not like the ONLY tax would have to be on cigarettes, etc. besides cigarette butts everywhere pollute, too.

Me?  I say tax the tobacco enough to provide vouchers for my dry cleaning bill.

twitter-follow-me10What do YOU think about tobacco taxes?

photo by Chris Schroeder

Jason taxes

Yakezie Posts