Reason Writers Around Town: Peter Suderman on Paying for Medicaid With Cigarette Taxes in The Daily



ver at The Daily, Reason Senior Editor Peter Suderman looks at Illinois Gov. Pat Quinn's proposal to fund part of the state's Medicaid program on cigarette taxes:

Illinois' Medicaid program faces a $2.7 billion shortage that its governor has promised to deal with. So how does Gov. Pat Quinn propose to close the fiscal gap for his biggest budget item and largest health program? By relying on the state's smokers to keep puffing — and paying — away. 

Quinn wants to shore up the fiscal health of Illinois' ailing Medicaid program by imposing a new per-pack tax on cigarettes, thus making the health coverage of millions of disabled and low-income individuals in the state directly dependent on keeping smoking rates up.

But if previous experiences with state smoking taxes are any indication, it won't work. In his February budget address, Quinn was blunt with state lawmakers. "Our rendezvous with reality has arrived," he said. He declared his intention to pass a $2.7 billion reform to the state's Medicaid system. Quinn's proposal, released in April, included a variety of cuts and payment reductions, as well a $1-per-pack cigarette tax that his office said would raise an estimated $337.5 million directly.

Sadly, the governor does not seem as eager to meet with fiscal reality as he claims: That revenue estimate from the smoking tax is almost certainly inflated.

Whole thing here

Much more from Reason on smoking taxes here


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  1. No doubt the guv will be expressing shock and dismay when cigarette smuggling explodes in his state.

    1. Its Illinois. He’s counting on getting a taste of that action.

    2. I used to work an evening job at a convenience store on I-95. You learn a few things you can bet money on:
      1) People from NJ can’t pump their gas.
      2) Start weekends with 20+ cases of Newports or you will run out, even with a 5-carton limit.
      3) Locals returning to Virginia apologize for telling you your cigarette prices are too high.

      1. Who the fuck came up with the “can’t pump their own gas” bullshit in that state? Is it a make-work edict to force gas stations to have attendants? A union thing? I truly am confuse – pumping gas doesn’t require a college degree.

  2. But if previous experiences with state smoking taxes are any indication, it won’t work.

    You say that as if people are supposed to look at history and not-repeat its mistakes.

  3. If you dare, go on over to Drudge and take a look at Hillary. Damn, that is one ugly woman.

    Did she pull a Joker move on her cheeks or something?

    1. “Why? So? Serious?”

    2. Don’t worry about breakfast. I will not regain my appetite for at least 12 hours.

    3. Worth it for the Merkel picture.

    4. Anybody else think that bloodied Russian rioter has photoshopped blood?

      1. I’m afraid to zoom in lest his blood cells look like Jar Jar Binks or something equally terrifying.

  4. See, after all the millionaires have been squeezed until they move to Nevada or St. Nevis, then you turn to the smokers. You can see the legislators and budget monkeys wispering in the back of the state house: “Yes, the smokers will keep the gravy train rolling.”

    My prediction – next year it will be the fatties. They’ll save Illinois.
    Tax the sugar Baby!

  5. there must be a gene in elected officials that requires them to be ignorant to rules of economics. On the one hand, they raise taxes on smokes as a means of discouraging smoking. On the other, they raise taxes on smokes in the belief that new revenue will materialize. And, voters keep putting folks like into office.

    1. “The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.”
      -Thomas Sowell

      1. Sowell’s penchant for pithy phrasing has been growing on me recently. Currently working my way through Black Rednecks & White Liberals.

  6. I have some smoker friends who got around the extra tobacco taxes here in Michigan by rolling their own – buying cigarette tubes with filters, a rolling machine, and loose tobacco. And then the state started taxing loose tobacco at higher rates, so my friends switched to *cough* light ‘pipe tobacco’. These are truly some nasty cigarettes, but they’re happy getting the nicotine fix.

    I say, if you’re going to poison yourself, at least do it with something classy.

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