Cigarette Taxes

The Jefferson City News-Tribune reports on one economist’s campaign to raise the cigarette tax. Tom Kruckemeyer wants the tax to go up by 15 cents per pack, with the resulting revenue to be spent on public health. And, although he doesn’t spell this out explicitly, it’s implied that the state will be doing everyone a favor by discouraging their smoking habits.

Let’s leave aside for now the issue of whether the government should discourage self-destructive behavior. If we agree that we should try to convince people not to smoke, is a slightly higher tax on cigarettes going to do the trick?

I don’t think so. First, cigarette smokers already face huge costs in terms of insurance premiums, medical care, health, and longevity. If they’re willing to accept those costs, an extra expense of a few pennies per pack is unlikely to deter them.

Second, smokers can go elsewhere to buy cigarettes. Here’s an example from the article:

“Being a low-tax state is a good thing,” said Ron Leone, executive director of the Missouri Petroleum Marketers Association. “Because it draws consumers from our higher-tax border states who come here and generate revenue.”

If smokers from other states come here to buy cigarettes now, Missouri’s smokers will be equally free to go elsewhere if we raise the tax.