Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, January 29, 1994 TAG: 9402250038
SECTION: EDITORIAL PAGE: A-9 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Medium
In struggling to fashion a case in favor of the potent carcinogen and against the Clinton administration's call for quadrupling the federal ciggie tax, Harry Lea of Danville gets his economics badly muddled.
Let's clear away the smoke:
Increasing the tax, he claims, will add 273,000 people to the jobless rolls. It will - if you make the highly unlikely assumption that each and every person who loses a cigarette-related job because of a tax-induced decline in consumption can find no other work. Meantime, smoking is killing some 400,000 Americans every year. Surely they're leaving some job vacancies behind.
Because steep increases in cigarette taxes have spurred illegal cigarette trafficking, the Canadian government is losing as much as $1 billion per year in revenues, Lea observes. It may be - if you overlook the obvious point that Canada wouldn't have such potential revenue to "lose" unless it had raised the tax. (The main cause of any Canadian tobacco-tax revenue "loss" is that teen smoking is down by two-thirds and adult smoking by one-half. The United States could stand such a loss.)
Current U.S. cigarette taxes are high enough, the writer asserts. They are - if you assume it's everyone else who's out of step. In the United States, the cigarette tax (the federal 24 cents, plus state and local levies) is 56 cents per pack. Examples elsewhere: Denmark, $3.68; Norway, $3.33; Canada, $3.01; Britain, $2.55; Germany, $2.11; New Zealand, $1.81; France, $1.58; Italy, $1.11; Japan, $1.05.
U.S. smokers, Lea argues, already are paying their fair share of the costs of their addiction. They might be - if you use an extremely and arbitrarily limited definition of costs, and probably not even then.
The congressional Office of Technology Assessment has calculated that cigarette smoking's direct cost to government health programs is $22 billion annually. To cover just that would require a tax of more than 80 cents per pack.
But there's also lost worker productivity due to sick days from cigarette-caused disease (another $43 billion, for a total tax of about $2.50 per pack). And the economic cost of premature death. And of the greater frailty of babies whose mothers smoke. Etc., etc.
The equation isn't hard to grasp. A healthy cigarette industry means unhealthy people. Unhealthy people make an unhealthy economy - including in a tobacco-producing state such as Virginia.
by CNB