An analysis by the Tax Foundation concludes that the proposed federal cigarette tax hike, which I criticized last week, is the "least defensible" method of funding the State Children's Health Insurance Program. "No other federal tax hurts the poor more than the cigarette tax," writes the foundation's Gerald Prante. "A politically popular, expensive program should never be funded by a small, low-income minority like cigarette smokers." Prante calculates that "the burden of the proposed cigarette tax hike [from 31 cents to $1 per pack] on the lowest-earning 20 percent of households is 37 times heavier than it would be if the government raised the money with the federal income tax. Put another way, the proposed cigarette tax hike would hit the poor with the same force as cutting the Earned Income Tax Credit (EITC) by one-fourth."
Prante adds that state and federal "taxes on tobacco products increased three times faster than alcohol taxes, the other major 'sin tax,' from 2000 to 2005." He suggests "the most likely reason for the disparity is that a majority of citizens enjoys alcohol while smokers are a minority, about 20 percent of the population nationwide." Picking on an unpopular minority with little political influence will always be easier than raising revenue through a broader-based tax, but that doesn't make it right, as self-identified progressives should realize.
By the way, for those who were skeptical of my claim that smoking probably, on balance, saves taxpayers money, Prante links to a 2001 paper by Patrick Fleenor that reviews the research on this issue, which is also discussed in For Your Own Good, my book on the anti-smoking movement.
[via The Rest of the Story]