Some Feel Doubt about “Sin Taxes”

TaxesIn “The Tax Conundrum,” Childhood Obesity News quoted Dr. Kelly Brownell, who differentiates meaningful change from programs that, while praiseworthy, are widely considered to be mere window-dressing, like healthy eating campaigns and corporate social responsibility initiatives.

When Dr. Brownell speaks of meaningful change, he is talking about putting some rules around marketing, regulating nutritional labeling, and most of all, taxing harmful and useless products like sugar-sweetened beverages.

The assumption is that the money gathered by the government will be used to reduce obesity. The people who worry that it will not be used in that way have plenty of evidence. They only need to point to what has happened with tobacco taxes. Whenever citizens have the chance to vote for a nicotine tax, they are probably under the impression that the money will be used for medical expenses, education and prevention, quitting programs, and the like.

In other words, since cigarettes cause public health problems, the people who smoke them are made to kick in a little extra to help pay for the damage. It sounds reasonable. But as time goes by, some citizens begin to feel they have been subjected to a bait-and-switch tactic. If they take the trouble to find out where the tax money went, they see it ending up in all kinds of places.

Where Tobacco Tax Money Goes

Currently, the average cigarette tax is $1.60 a pack, but it is higher in many states: in Arizona, it sits at $2 per pack and in Washington it’s at just over $3 per pack. Nevada’s tax was a mere 80 cents per pack, up until July 1, when it leaped to $1.80. Ray Hagar reports:

It is expected to raise an additional $192 million for the state in next two-year budget cycle…All of the new funding from the tax increase is destined for the state’s projected $7.4 billion general fund…Much of the new cigarette taxes could go to education funding…

As Californians smarten up and smoke less, their state sinks deeper into insolvency. Preschool and early childhood services are on the chopping block. Deepa Fernandes writes:

Eighty percent of tobacco taxes go directly to fund programs for children under five…The funds were spent on such services as pre- and postnatal programs, nurse home visits for at-risk families, and quality improvements to preschools.

These designations were made, by the way, with voters’ approval, which makes a certain amount of sense. Why spend it on people with cancer who are just going to die anyway? The problem with this sort of allocation is that anyone who cares about young children might feel it is their patriotic duty to smoke.

Kansas has been struggling with the tax question, too. The state is staring a $700 million budget deficit in the face. The governor wants to put $100 million in the general fund by raising sales taxes on liquor and tobacco. But the tobacco industry, which naturally does not want its products to be taxed, sent lobbyists to the state Senate. Their job was to convince the legislators that all the talk about health benefits is a lot of hooey. The state just wants to put a bandaid on its fiscal crisis.

The state government has an answer for that. Because of the higher tobacco tax, people who might have started smoking will not start. The state reckons it will save 15,000 residents from dying of tobacco-related illnesses. And of course the state won’t be spending on health care for any of them. But the actual revenue that is actually collected, that will be going for other things.

Your responses and feedback are welcome!

Source: “Thinking Forward: The Quicksand of Appeasing the Food Industry,”, 07/03/12
Source: “State’s largest-ever cigarette tax hike burns smokers,”, 07/03/15
Source: “With tobacco tax revenues in decline, hunt is on to find another way to fund free preschool,”, 03/27/15
Source: “Opponents of tobacco tax say it’s all about the money,”, 03/24/15
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