From today’s Washington Post, why tobacco policy is so scattershot:
Ironies abound. The February expansion of the State Children’s Health Insurance Program is supposed to be financed by increased tobacco taxes, so this health care depends on an ample and renewable supply of smokers. State governments, increasingly addicted to tobacco tax revenue, face delicate price calculations: They want to raise their regressive tobacco taxes (smokers are disproportionately low income and poorly educated) to just below where smokers are driven to quit.
Governments cannot loot tobacco companies that do not flourish. In a 1998 settlement, 46 states conspired to seize $206 billion from companies selling legal tobacco products made from a commodity subsidized by the governments that subsidize treatment of tobacco-related illnesses. The dubious premise of the settlement was that smoking costs governments substantial sums. Actually, tobacco is the most heavily taxed consumer good (Rhode Island’s tax is $3.46 per pack) and the accurate actuarial assumptions of public and private pension plans are that premature deaths of smokers will save billions in payments.