The free market has caused an epidemic for nicotine-addicted Americans. The predominantly unrestricted market has caused widespread and cheap access to tobacco filled cigarettes. Tobacco products are bountiful, and the average cigarette costs the same as a stick of gum (Source). The low cost allows smokers to slip in a constant state of dependency and endure the unhealthy consequences that follow. Millions of American users are subject to the health and societal effects of nicotine addiction (Source). Smoking and secondhand smoke kill thousands daily (Source). Anti-smoking campaigns have been somewhat fruitful in decreasing the net amount of smokers, but not to the extent economic changes may be. Economists have long debated the sin tax/excess tax as a viable solution for tobacco-dependent America. Sin taxes levy a large tax on unhealthy addictive products such as alcohol and tobacco . Although, the effectiveness of such a fee is heavily debated. Excess taxes could potentially help the user get rid of their addiction which improves health, and in doing so provides profit for government. However, when in effect, sin taxes target smoking demographics that lead the tax unfairly regressive, furthermore they also result in a plethora of negative unintended consequences.
Government has a moral responsibility to force this tax on sellers and buyers, for the sin tax indirectly extends life expectancy and improves health for nicotine addicts in America. In 2017, the Centers for Disease Control estimated nearly half a million citizens prematurally died from tobacco products and second hand smoke (Source). Over the last 100 years, smoking has killed over 100 million people (Government should). Following this trend, in the next 80 years death caused by tobacco will kill another billion. In developed countries, smoking tobacco shortens life expectancy by 25 years (Government should). Although complicated, smoking is an epidemic completely preventable: don’t smoke. On average, quitting at middle age increases life expectancy by 10 years (Government should). Why then do smokers continue to smoke? Consumers utilize economizing behavior while purchasing products. Shoppers lay out the cost of procuring a item and the value of the subjective benefit received. From the perspective of the consumer, the habit-forming incentives outweigh the costs. Incentives drive decisions that ultimately guide behavior and choices. As the cost of a product rises whereas the utility derived from the product stays the same, an incentive to not purchase the product begins to rise. People respond to incentives in predictable ways. The tax incentives people to not purchase tobacco products through the simple logic of rising cost. Eventually, the cost of taxation will outweigh the subjective benefit and persuade the user to abstain from buying tobacco products. A multitude of peer review studies have shown that a 10% increase in the price of a pack has decrease consumption by 5% (Increasing the tobacco tax…). The same 10% increase will prevent 7% of pregnant women from smoking, preventing thousands of miscarriages and tens of thousands of debilitating birth defects (More taxes less). States should ignore powerful lobbyists and big tobacco companies, and prioritize the health of their citizens first. New york city tripled the excess tax on cigarettes which doubled the price of a cigarette pack. If the rest of the United States imposed a similar tax, we would prevent 3 million premature deaths by 2030 (Gov should tax tobacco). Competition in the market naturally drives prices down, and without the government acting as taxing force, cigarettes will remain cheap and uncostly (Source). The absence of state interference will inevitably ensure ailing health effects and shortened lives of millions of Americans (Government should). The government has a responsibility to raise cigarette taxes in promotion of public health.
State collected profit obtained from the excess tax would supply a myriad of beneficial public goods and services. Out of all the states, Pennsylvania collected the most money from sin taxes in the fiscal year of 2014. They obtained nearly $3,000,000,000 (3 Billion dollars). The fee was enough to pay for 9% of all state expenditures (Source-See graph). The $3,000,000,000 was enough to fund higher education such as public colleges, alongside all government run debt services (Source). Comparatively, the state of Florida has 7 million more citizens than that of Pennsylvania. The state of California has 26 million more citizens than Pennsylvania (Source). Despite the noticeable disparities in population, California and Florida combined generated only 80% of what Pennsylvania earned from sin taxes. If Florida were to impose the same tax per cigarette pack as states such as Pennsylvania and New York, we would provide billions more to the state budget. The surplus in the budget could be used to build a reliable public transportation system, improve educational standards in public school, or otherwise be put in the reserve. The tax is a deterrent to smokers, whilst at the same time improving standards of living for all. Yet, it’s glaringly ironic that the smokers “benefitting” from this public policy are the same people that are exploited and forced to pay because of their addiction.
Sin taxes are an excuse to oppress and punish lower income communities while mooching off of their addiction. Those living below the poverty line are 50% more likely to smoke than the wealthier counterparts (Cigarette taxes punish). The poorest communities are more susceptible to use tobacco as ad campaigns target them heavily. Florida is a prime example of disparities in wealth and the effect of the sin tax that follows. Smokers living in poverty pay 7 times as much of their income compared to the wealthiest smokers. These poor groups pay upwards of 17-30 percent of their yearly income on this tax, whereas the rich pay under 3 percent (Taxes hit poor). This fee would be detrimental to the person making $20,000 annually. Not only are these addicts dealing with a horrible addiction, poverty stricken people have to cough a sizeable amount of their income to the government who claims to be “helping them.” The revenue acquired from the tax is rarely used for amenities such as healthcare that would actually benefit the smoker. In Oregon, most of the excess tax revenue is used to pay for services such as education and law enforcement. These amenities have nothing to do with the interests of the smokers, the people ultimately paying for the tax (Cigarette taxes punish). Without this tax, Oregon would be left with a $288 million gap in the State budget. How handy is it for the state that tobacco is one of mother nature's most addictive substances? Smokers are dependent on nicotine and without it suffer painstaking withdrawal. Smokers are enslaved and held destitute for their addiction. Politicians pretend to be anti-smoking. If they truly were, they would use the money acquired from the Sin tax and fund anti-smoking campaigns. Oregon’s public anti smoking campaign received nearly no money, only 16% of what the C.D.C. recommends necessary. But instead, the sin tax exploits low income groups and fund other services unrelated to the health of the smokers (Cigarette taxes punish). The fee provides services for non smokers who don’t pay and punishes those who pay. This creates a free rider problem. A free rider problem is a market failure that occurs when people take utilize a good or service without contributing to its cost. Tax fairness is generally related with progressivity, of which the regressive Sin Tax as described has none. Alongside vulgar regresitivity, sin taxes cause a multitude of negative externalities.
Sin taxes have many unintended consequences that ultimately hurt the marketplace, consumer, and state at whole. Economist and Author Douglas French describes economic interventionism. “They bring about a state of affairs, which—from the viewpoint of its advocates themselves—is much more undesirable than the previous state they intended to alter (CON: soda).” The tax interferes with the unregulated market, and in doing has worse outcomes than the problems it was originally trying to fix. A minimum wage pack-a-day smoker in New York would be losing 30% of his wage to the tax. While these financial burdens are aimed to make the addict quit, instead they often buy cheaper products. Cheaper cigarettes are often mass produced and filled with unhealthy preservatives (People buy Elsewhere).