Less Than Zero

The real cost of smoking

Suppose you earn $100,000 a year, invest well, and decide to retire at 65 rather than 70. According to the U.S. Centers for Disease Control and Prevention (CDC), you have just cost "society" half a million bucks.

In an April 12 report, the CDC announced that "productivity losses" due to smoking—the money smokers would earn if they lived longer—amounted to $3.73 per pack of cigarettes in 1999. It estimated that smoking-related medical expenses represented another $3.45 per pack, for a total of $7.18.

"There's a big difference [between] the cost to society and what society is getting back in tax," a CDC official said. "We believe society is bearing a burden for the individual behavioral choices of the smokers."

Counting forgone income as a "cost to society" suggests that every individual has an obligation to work for the highest possible wage until he drops dead. According to this view, anyone who chooses to trade income for leisure, better working conditions, or early retirement imposes a burden on society for which he ought to be taxed.

In estimating smoking-related medical expenses, the CDC likewise made no attempt to distinguish between costs borne by third parties and costs borne by smokers themselves. Nor did it ask whether smoking raises health care costs on balance, which requires taking into account the medical expenses people would incur if they did not smoke.

Yet as the CDC is eager to point out, smokers tend to die sooner than nonsmokers, which means less health care in old age. A 1997 study in The New England Journal of Medicine found that total medical spending actually would go up if everyone stopped smoking. Smokers also collect less from Social Security—another factor mysteriously absent from the CDC's calculation.

In short, the true cost to tax-payers from smoking is probably less than zero, which makes the CDC more than 100 percent wrong.