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What They Don’t Know

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Vice President Al Gore says that if the tax on cigarettes is raised $1.10 a pack in the next five years, teenage smoking will drop 42 percent on average nationwide. Not 41 or 43 percent. Forty-two percent. Further, he says that 991,000 deaths from smoking would be avoided. Not 990,000 or 992,000. Exactly 991,000. That’s precision.

Mr. Gore demonstrated that he’s up on the hottest fads when he added, “Nearly as many Americans die every single day from the effects of smoking as died on that one day 85 years ago in the sinking of the Titanic.” He failed to point out that many passengers who died on the Titanic were smokers. They probably smoked as they went down with the ship. Well, life is risk.

The pseudo-precision paraded by the vice president is so typical of Washington. He thinks that because in the past teenage smoking declined about 7 percent when the price of cigarettes went up 10 percent, that’s how it will be in the future. As usual, an officer of the government has left one thing out of the formula: autonomous individuals. The past is history. The future is largely uncertain. This is not to say there are no regularities. People, even teenagers, are sensitive to price changes. The problem is that we cannot know how that sensitivity will manifest itself. Faced with higher prices, will teenagers give up smoking? Cut back? Stop buying other things so they can maintain their habit? Look for higher-paying jobs? Beg their parents for bigger allowances? It’s all guesswork from here. How many people outside the sneaker industry thought teenagers would spend $75 or more for shoes?

Do Gore and President Clinton really believe teenagers will stop smoking if the tax goes up? They must think someone is going to keep smoking. They already have plans for the revenues. The administration wants to use them to finance a huge expansion of government-sponsored medical care for children, including many who do not meet the government’s poverty standard. This is typical of government work. They tell us that they want to increase the tax to discourage smoking. If it does that, the tax on smokers shouldn’t raise much money. But they are already spending the money! Sounds like the usual budget shenanigans. The spending program will be put in place. Then, if the cigarette-tax revenues are insufficient, they will raise other taxes to keep their “commitment” to KidCare.

Of course, it is entirely possible that people, including teenagers, will keep smoking and that the revenues still will fall short. How? Through those two great American traditions: smuggling and bootlegging. Canada some years ago had to repeal a cigarette-tax increase when smuggling from the United States got out of hand. Governments never learn. You’d think that the U.S. government would be different. After all, America was born in tax revolt. Smuggling was our forbears’ favorite pastime before and after the Revolution. Heck, back then no one was more hated than the customs agent and no one more revered than the smuggler. We’ve come a long way, and in that sense at least it has not been a good way.

Yes, yes, smoking cigarettes can be bad for you. Everyone knows that. Indeed, the eminent risk analyst Kip Viscusi has shown that smokers overstate the risk. They think they are more likely to get sick and die early than they really are. This is not a case of ignorance. (By the way, other people’s smoke is not a significant risk, according to the World Health Organization.)

As for kids’ smoking, it’s a family matter, pure and simple. Everyone today says he favors revitalizing the family. Here’s my challenge: Prove it! Leave it up to parents to prohibit and discourage their children from smoking.

A final point: do not fall for the line that the tobacco tax needs to be raised to cover the medical expenses of smokers. Even the Congressional Budget Office, when the Democrats controlled it, realized that the tax overcompensates. Those who think otherwise labor under the ridiculous, tacit premise that people would live disease-free forever if they didn’t smoke. Everyone dies of something. If smokers are dying prematurely from smoke-related illnesses, it follows that they are not dying later of much costlier diseases. You could look it up.

The tax system should not be used to encourage or discourage behavior. That simple truth yields at least one conclusion: the cigarette tax should be repealed.

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    Sheldon Richman is vice president of The Future of Freedom Foundation and editor of FFF's monthly journal, Future of Freedom. For 15 years he was editor of The Freeman, published by the Foundation for Economic Education in Irvington, New York. He is the author of FFF's award-winning book Separating School & State: How to Liberate America's Families; Your Money or Your Life: Why We Must Abolish the Income Tax; and Tethered Citizens: Time to Repeal the Welfare State. Calling for the abolition, not the reform, of public schooling. Separating School & State has become a landmark book in both libertarian and educational circles. In his column in the Financial Times, Michael Prowse wrote: "I recommend a subversive tract, Separating School & State by Sheldon Richman of the Cato Institute, a Washington think tank... . I also think that Mr. Richman is right to fear that state education undermines personal responsibility..." Sheldon's articles on economic policy, education, civil liberties, American history, foreign policy, and the Middle East have appeared in the Washington Post, Wall Street Journal, American Scholar, Chicago Tribune, USA Today, Washington Times, The American Conservative, Insight, Cato Policy Report, Journal of Economic Development, The Freeman, The World & I, Reason, Washington Report on Middle East Affairs, Middle East Policy, Liberty magazine, and other publications. He is a contributor to the The Concise Encyclopedia of Economics. A former newspaper reporter and senior editor at the Cato Institute and the Institute for Humane Studies, Sheldon is a graduate of Temple University in Philadelphia. He blogs at Free Association. Send him e-mail.