Charlie Rangel Sees the Light on Cigarette Taxes

With the House vote to overturn President Bush's veto of the SCHIP expansion bill scheduled for tomorrow, the smokers' rights group NYC CLASH highlights House Ways and Means Committee Chairman Charles Rangel's turnaround regarding the fairness of cigarette tax hikes such as the one included in the bill. In 2002 the New York Democrat opposed Mayor Michael Bloomberg's (ultimately successful) proposal to raise New York City's per-pack tax from 8 cents to $1.50, issuing this statement:

Congressman Charles Rangel today came out in strong opposition to the dramatic increase in the city's cigarette taxes, describing it as an unfair burden on the poor.

"Low income people are the ones who will suffer from this," Congressman Rangel said.  "They are the ones who willl really feel the burden of a $1.50 tax.  To those who are better off, the tax won't make any difference at all."

The Congressman, who has long opposed excise taxes on similar grounds, also questioned the argument that the so-called "sin tax" will change behavior.

"If the motivation is to provide a kind of treatment for smokers by punishing them economically, the attempt is not only unfair, it is likely to fail," Congressman Rangel said.  "People stop smoking because they want to; if they want to continue they will find a way to get cigarettes they can afford—even if it means illegally on the black market, on the internet or traveling to low tax states."

The Congressman said he understood the city's need to raise revenues, but took issue with a method that would disproportionately burden the poor.

Nowadays Rangel is singing a different tune. Here is how he explains his support for financing the SCHIP expansion by raising the federal cigarette tax from 39 cents to a $1 pack:

I have a history of opposition to excise taxes, but in light of the heavy financial weight smokers place on Medicare expenditures and the overwhelming proof linking the increase in cost of tobacco products with a decrease in youngsters buying cigarettes; it's the right call.

As I've noted, the charge that smoking increases government spending appears to be false. Even if there is a net cost to taxpayers, there is no evidence that it exceeds the revenue generated by cigarette taxes at current rates. As for deterring underage smoking, teenagers have not become any more price sensitive in the last five years. And how is it just to penalize adult smokers for the misbehavior of teenagers and the people who illegally supply them with cigarettes? If Rangel was right about the regressivity of cigarette taxes, and he was, he needs to do a better job of explaining why it is suddenly fair to make smokers bear the burden of SCHIP expansion, especially since the people picking up the tab for the expansion would often be poorer than the people benefiting from it.