February 18, 2007

Iowa Cigarette Tax Hike: Pick a Goal

Iowa is the latest state in which tax-averse lawmakers are looking to the cigarette tax as an alternative to more sensible (but less popular) revenue-raising ideas. The editorial board at the Clinton Herald comes down hard on the idea that the cig tax can be used both to pay for public services and to discourage smoking:
The $1 tax increase would bring in roughly $130 million, according to state estimates, which [Governor Chet] Culver wants to use to expand access to health coverage. But anti-tobacco activists are happier about the potential impact on the number of people who smoke, hoping the extra cost will discourage people from continuing their addiction or, in the case of teens, make smoking too costly a habit to begin.
As we have argued before, the two arguments are mutually exclusive. If the state raises the cigarette tax to generate money for health care, then it needs people to continue smoking at exactly the same rate as today. Otherwise, the money will dwindle and something else will be needed to prop up that portion of the budget...All we’re asking is for lawmakers and the governor to be up front about their plans. If they want to raise more money for health care, fine. If they want people to quit, fine. But it is time for everyone to acknowledge that both goals cannot be met simultaneously.
We've talked before about the basic dishonesty of asserting that a cig tax can achieve both revenue-raising and revenue-losing goals. But it would be hard to express this more succintly than the Clinton Herald does here.


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