In the crazy world in which we live, a blog looking to make sense of it all.

Friday, August 10, 2007

Smokers Kick The Habit Thanks To Higher Taxes

According to a study conducted by USA Today, the higher state taxes on tobacco are placed, the more smokers kick the habit. USA Today claims from their study that the degree of decline of smoking is directly tied to the size of the tax increase. Examples include an 18 percent decline in cigarette sales after sales taxes were raised from 5 cents to 35 cents in North Carolina and in Connecticut, a decline of 37% in cigarette sales after a 200% increase in taxes over a 5 year period. USA Today also noted that the Congressional Budget Office estimated that smoking declines about 2.5 - 5 percent for every 10 percent increase in the cost of cigarettes.

After reading about this, I wonder how Illinois' new tax on cigarettes will play out. Now is not the time Illinois can afford a loss in revenues. But this is what happens when you put all your eggs in one basket. Tax revenue from the sales of tobacco almost fund everything it seems like. So if they tax this product heavily, claiming they want people to kick the habit, and if they are successful, where will the tax revenues be to run this state. If no one is buying tobacco products, no tax revenue is made.

I'm sure there is an argument that the increase in tax offsets the decline in smoking. But my guess is that, in general, it is the more educated, well-to-do, affluent individuals that kick the habit. Lower wage earners and uneducated people tend to continue smoking. If my guess is correct, that means this new tax will be hit primarily on the poor and for those who cannot really afford this tax hike. You have to wonder about the business sense of our leaders in Springfield and a certain residence in the Chicago area.

Common Sense of it All: So when the smoking ban takes place, and the tax increase hits, I hope that every smoker in the state quits, thus shutting out all tobacco tax revenues. In addition, they should stay out of bars and restaurants too because alcohol and greasy cheeseburgers are bad. Serves Illinois right! And we'll be saving lives, won't we? Oh, by the way, I don't smoke and never have.