Cigarette-tax increase presents benefits beyond revenue
Tuesday, June 17, 2008 1:05 AM PDT
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E-mail this articleJune 17 Daily News editorial
Oregon Gov. Ted Kulongoski will have another go at raising the state’s cigarette tax in order to extend health coverage to more than 100,000 uninsured children. The Oregonian reported on its editorial pages Saturday that the governor has called on legislators to revive the 84.5 cent-per-pack tax hike voters rejected last fall. This time, however, the tax increase would not be submitted to voters as a constitutional amendment.
The change in strategy may well improve the measure’s chances of passage next year. Sen. Gordon Smith, R-Ore., and other supporters of last fall’s ballot initiative have speculated that voter misgivings about putting the tax hike in the state constitution played the biggest part in Measure 50’s defeat. Indeed, the tobacco industry mounted a major advertising campaign warning voters not to tamper with the constitution.
Gov. Kulongoski remains convinced that most Oregonians support an expansion of children’s health coverage. That may be. Still, it bears noting that so-called sin taxes are an unreliable source of revenue, given that higher taxes tend to cause more consumers to cut back on the targeted sin. Increases in the price of cigarettes tend to motivate more smokers to kick the habit and deter more young people from taking it up.
The latest evidence of this effect comes from New York, which as of this month has the highest cigarette tax in the nation. New York health officials reported this week that calls to the state’s Smoker’s Quitline quadrupled to nearly 10,000 during the week of June 2, when the full $2.75-a-pack tax kicked in. Of course, not all who attempt to quit smoking are successful. But several national studies show that cost is an effective deterrent to smoking. The federal Institute of Medicine, which has long prescribed a cigarette tax of at least $2 per pack, has found that a 10 percent increase in the price of cigarettes can be expected to reduce smoking among adults by about 4 percent. Among children and adolescents, it’s an 8 percent reduction.
Pricing this tobacco product out of the youth market is a worthy goal. Indeed, it would seem to offer as many health benefits as expanding health coverage. In Oregon, an estimated 48 children and adolescents take up smoking each day. Their habit adds considerably to public health-care costs over the years. According to Gov. Kulongoski, every pack of cigarettes sold in Oregon eventually adds $11.16 in costs to the state’s health-care system.
The value of a high cigarette tax is realized not so much in the new revenue it produces in the short term as in the lives and health-care dollars saved over the long haul.
TDN Bad Boy wrote on Jun 17, 2008 7:56 AM:
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