Here’s a humorous cartoon by Tom Toles, who draws for the Washington Post and thus no doubt represents the elitist northern Virginia perspective on tobacco taxes–which would be basically mine–which thinks that tobacco taxes are a pretty appealing way to raise revenue because unlike most taxes that (usually unavoidably) discourage productive activities, tobacco taxes would discourage destructive (or at least socially inefficient) activities. (Toles teases that even the liberals may oppose this tax increase this time around, on the grounds that like any tax, it would reduce the deficit and hence “kill jobs”–pun intended.)
But here’s a totally different perspective, from the Fredericksburg, VA Free Lance-Star newspaper–just another example of the divide between northern VA and the rest of the Commonwealth (and even with Fredericksburg being not that far south, just down I-95 about halfway between DC and Richmond):
Let’s get out of the way the obligatory acknowledgment that cigarettes are bad things. They’ve put millions of people in the ground, including some non-users forced to “smoke” through their nostrils the gaseous detritus of actual puffers. They’ve degraded the health of countless others, driving up medical costs. Their slovenly use, manifested in roadside litter, annoys the majority who don’t mistake public space for an ashtray. No wonder Gov. Kaine, facing a serious budget shortfall, wants to double Virginia’s cigarette tax to 60 cents a pack.
Yet let’s recognize that Mr. Kaine’s proposal represents a kind of classism. Cigarette smokers generally occupy the lower economic strata, which means that few of them inhabit the social sphere of governors and of the business and journalistic elites with whom the political class hobnobs. A cigarette tax, in short, is a tax on “them,” not “us.” Elites still like their microbrews, their merlots, and their double-malt Scotches, which is perhaps why Mr. Kaine isn’t pushing higher taxes on another socially problematic substance, alcohol.
This is the distributional argument against many taxes that economists would consider “good,” externality-correcting and/or socially-conscious taxes. They all tend to be regressive taxes, burdening lower-income households relatively more than higher-income ones, simply because consumption of goods in general represents a higher fraction of the incomes of poorer households. The Free Lance-Star goes further to argue on the unfairness of a tobacco tax, by pointing to the other possible “bad” things we could tax in a “good” way, but we don’t:
Mr. Kaine, citing federal data, says that smoking-linked illnesses cost the state $400 million a year in Medicaid expenses. But what of other iniquitous products and habits? The scarcely estimable toll of alcohol abuse includes everything from liver disease to fatal accidents to lost productivity. Obesity costs 12 percent of the U.S. health care budget, yet Mr. Kaine isn’t targeting doughnut shops and KFC for extra taxes, or putting state levies on chocolate sin cake. The price tag of irresponsible sex is stupefying: In California in 2005, for example, 1.1 million new cases of sexually transmitted infections imposed a direct medical cost of $1.1 billion. But with the possible exception of Del. Bob Marshall, nobody in Richmond is talking about a promiscuity tax. Why should chaste smokers pay the medical freight for satyrs and tramps? And though the average problem gambler imposes social costs of at least $14,000 a year, it’s inconvenient for Mr. Kaine to suggest taxing that vice, since the state, through the lottery, is its primary purveyor.
Verily, all have sinned and fallen short of the glory of clean living–or at least almost all. This fact, at a time of fewer dollars to treat Virginia’s sick and poor, argues for a general tax, not one pinned on a single group of self-abusers. If a doubled cigarette tax means fewer nicotine junkies, that’s a very fine thing. But fairness? Cough-cough. Let’s change the subject.
Oh, but we could consider taxing those other “bad” things (recall my post on Governor Paterson’s idea and other related ones I suggested), and such taxes would still be economically and socially preferable to taxing the consumption or income in general of even lower-income households. There may be administrative complexities that make it too hard for the tax system to effectively chase after those “bad” things, but can’t you imagine that if we had more “sin taxes” that people would be more willing to pay those taxes as a small price for those sins? (Why, maybe folks would proudly pay and even brag about owing a “promiscuity tax”….) And those who cannot afford to pay for their sins might be encouraged to stop “sinning.”
As a northern Virginia mega-church’s (McLean Bible Church’s) radio ad campaign is famous for saying: “Not a Sermon, Just a Thought.”