Are cigarette taxes supposed to raise revenue or reduce smoking?

Question

And if it's supposed to reduce smoking, HOW does it do that?

WAIT - HOLD THE PRESSES!!!!!

Ideo, stay with me here, I sense a major breakthrough in your economic thinking....

You, ON YOUR OWN, posted that a tax on smoking WILL REDUCE SMOKING.

A tax on an activity will reduce that activity..........

Raise that tax and you further reduce that activity........

So you must now understand, finally, that if that activity is INVESTMENT AND PRODUCTION, WHICH IS WHAT CREATES JOBS, THEN THE SAME PRINCIPLE APPLIES.

Cigarette taxes reduce smoking because the smoker has a disincentive to buy the pack of cigarettes and because he is left with less capital to spend on cigarettes.

It must work the same way with productive investment.

Has to.

And it does.

If you still can't see that then it's only because you don't want to.

And yes, that's why I asked this question.

Oh, Brush, force the companies to reduce the amount of nicotine in the cigarettes - - - - well, what gives you the right to do that? You admit that's why the buyer is buying the cigarettes, so why intefere with the consumer's choice?

Answer 1

Its a tax aimed at a small minority of the population that tends to have lower income to begin with. Its just an easy way for the politicians to put money in their pockets without too much resistance.

Imagine the uproar if they tried to jack up alcohol prices by 50%.

How about a yacht tax or a private jet tax? Yeah, right. They'd rather tax the poor.

Answer 2

The SCHIP program that Bush vetoed put a tax on cigarettes to raise the money that they plan to use for this "hugely expensive" expansion of this program.

However less than 20% of the population smokes and a good majority of those who do are usually financially strapped. So it does both at the same time. As taxes increase, more and more people will do without, but those still smoking pay higher taxes and thus the government gets the same or more revenue from those people.

But if this tax is supposed to help the poor with better healthcare, why are we taxing the poor people who smoke who support this program?

Answer 3

Raise revenue.

The laws raising cigarette tax are being accompanied by draconian and invasive measures banning smoking from all public buildings. This is just to fool the masses into thinking health has something to do with it.

The reality is, restaurants and bars are screwed. People will smoke and drink at home. DUI arrests will go down. States will lose money on DUI's.

Now, if they make cigarette smoking illegal, they can fix the problem of DUI revenue going down.

And the doctors and pharmaceutical companies are making out like bandits on this anti-smoking campaign! Just how safe are these anti-depressants? Look them up on the web.

Answer 4

The truth is that it is strictly to raise revenue but they have to lie and say it is about getting people to quit. The truth is that they dont want people to quit because then they are left without revenue. They know that the majority of people do not smoke so taxing cigarettes will seldom be an issue come election time.

Answer 5

Both.

Taxes have three purposes: 1) raise revenue, 2) redistribute wealth, and 3) influence behavior.

"Sin taxes," such as those on cigarettes and alcohol, are intended to raise revenue while discouraging undesirable behavior. Since these are considered discretionary purchases, unlike food, it's believed they can support the higher tax rates.

Simple concepts like supply and demand, in this case, the demand curve alone, demonstrate how this affects behavior. As the price of an object increases, the demand for it decreases. Cigarettes are believed to have relatively "inelastic" demand curves, as smokers are somewhat addicted to their habit. Still, more want to quit each year, and the higher price of cigarettes only encourages them. If you spend $5 a day on smokes, quitting now will give you another $3,000 in your pocket next year. That's incentive.

Answer 6

They are designed to do both and they succeed in doing both. Every time that the cigarette taxes are raised, smoking by children drops.

Cigarette smokers occupy a strange place in American society. Here is a group of addicts, smoking a gateway drug more powerful than weed, and who are responsible for the deaths of hundreds of thousands of innocent bystanders, who contribute to the high cost of healthcare for all and who think that they have a God given right to smoke anywhere, anytime, near anyone - including pregnent women and children. These people throw their lit cigarettes out of windows of cars becuase they know that the world is their ashtray and who cause traffic accidents because they are too busy lighting up their next fix to pay attention to their driving.

I'm not for banning cigarettes, but I feel that my right to be healthy outways their right to deliberately poison me.

Answer 7

Well, it reduces smoking because of the elasticity of demand for cigarettes (as prices rise, consumption falls).

But as a revenue raising strategy, it will fail if it succeeds in stopping smoking and the revenue will have to come from somewhere else. Sin taxes should only be part of the health-care financing strategy. If they discourage cigarette consumption, for example, it saves us in health-care delivered to cancerous smokers later.

Answer 8

According to our friends in congress it will raise money. According to economists it will raise money in the short term but will cause more people to quit smoking and will result in less tax dollars coming into the federal coffers. The reason it causes some people to quit smoking is because they decide that the cost of cigarettes is beyond what they want to pay.

Answer 9

the whole idea of using sin tax to support growing programs is ludicrous. Medicare and medicaid will exceed 20 % GDP by 2050 meaning those two programs alone will exceed the entire federal budget. Yet we want to add more to the healthcare entitlement program by taxing something they are banning all over the country. when the revenue of smoking taxes cant keep up with the growth of programs do they really think the programs will be eliminated, ofcourse not they will just up all our taxes. I know its hard for liberals to think further than their hearts but how can anyone not see the inherent problems this will create. amazing.

Answer 10

Nicotine is addictive. Just like a heroine addict, someone who smokes will pay anything to get their fix. It's just a revenue horse.