Cigarette Tax Hike and Tobacco Use

Every year, it seems, the Idaho Legislature is faced with a smoldering question: should the state cigarette tax be raised? There has been a push again this year by health organizations and other groups to raise the tax on smokes sold in Idaho by another $1.25. And, if you believe Idaho Medical Association CEO Susie Pouliot, almost three-quarters of Idaho voters support that. The current Idaho cigarette tax is 57 cents a pack, the lowest in the region. In addition to the survey showing broad public support, advocates are armed with other statistical claims, among them: n A recent study indicates tobacco use costs Idaho more than $300 million a year in health care-related costs. n Increasing the cost of cigarettes will prevent 12,500 Idaho youth from taking up smoking. It’s common for advocacy groups to find ways to inflate statistics in their favor. It’s safe to say opponents of a cigarette tax hike would dispute the ones listed above. After all, how can anyone say for sure exactly how many kids would be dissuaded from smoking if the tax were raised? Such numbers are speculation, at best. Still, there’s no doubt a steep price increase would cut down on the number of smokers. Not as many people could afford it. It’s simple math. It’s estimated that a $1.25 increase on cigarettes would generate another $50 million for the state. But that’s disputable, too: if fewer people can afford cigarettes, the tax increase could be negated by the drop in sales — or people who buy them elsewhere, where they’re cheaper. In 1965, 42 percent of American adults smoked. In 2010, 19.3 percent did. At least some of that can be attributed to higher costs. So realistically speaking, does a cigarette tax increase of that magnitude stand a chance in tax-resistant, independent-minded Idaho? If it does, advocates would have to present it from a financial perspective: It costs state taxpayers money to treat smokers because of their habit — in everything from high blood pressure to dental care — so at least some of that expense needs to be covered by the very thing causing it. Backers of the increase are promoting it as a “user fee.” That’s wise. Attempts to sell it as a “sin tax” or way to increase state revenue won’t play well with voters or lawmakers. Virtually all smokers know they engage in an unhealthy habit. Money spent on “educational” programs to inform them of that seems wasted. They know it. They do it anyway. Unless we ban tobacco outright, people are going to use it. Attempts to increase its cost via taxes should be based on business principles.