Included in President Clinton’s proposed new budget is a call for a 25-cents-a-pack increase in the federal tax on cigarettes. Having seen his 55-cents-a-pack increase in the cigarette tax defeated last year by Congress, Clinton is hoping that a more modest proposal will have a better chance of getting enacted.
The cigarette-tax increase is rationalized as another step in trying to reduce teenage smoking. If it passes, the federal tax on cigarettes would go up from its present level of 34 cents to 59 cents a pack. Added to state taxes, the price of cigarettes around the country would be $4 dollars or more per pack. The hope is that at this price, more minors will be deterred from smoking. (While the Clinton administration insists that tobacco is an addictive drug that requires federal regulation, it’s apparently not so addictive that a hefty increase in price might make it too costly to continue the habit.)
Clinton’s proposal, of course, represents his continuing attempt to socially engineer people’s pleasures. The ordinary citizen is considered too weak-minded to know what is best for himself, and he needs the government to protect him from the health hazards that might come with smoking.
Added to the cigarette-tax proposal is a penalty clause against the tobacco companies. If the number of smokers the age of 18 has not been reduced by half by 2004, the cigarette producers would face an annual fine of $3,000 for every underage smoker in the United States. The White House has estimated that there are currently about 4.1 million smokers in America under the age of 18. If the cigarette manufactures fail to meet the target, they could owe the federal government $6 billion or more in penalties four years from now.
How would the number of underage smokers be determined? So far, the Clinton administration has been silent on the point. But using the administration’s figure of a current 4.1 million underage smokers, a 5 percent error in counting could result in the tobacco companies’ being overpenalized by well over half a billion dollars.
Since it is now illegal to sell tobacco products to minors, sales records from retailers would produce no concrete statistical information for calculating how many young people were still smoking. It is also highly unlikely that teenagers could be relied upon to truthfully fill out any survey forms distributed at school. And anecdotal estimates made by the government would hardly be considered acceptable evidence if the tobacco companies were to take the matter to court.
Let’s consider some likely alternatives. Like turning to the Bureau of Alcohol, Tobacco, and Firearms to devise ways of digging out the “hard evidence.” Or how about sweeps by federal agents in schools throughout the country to identify underage smokers? Teenage informants working for the government either under threat or for payment? Armed searches of private homes to track down serious teen-smoking offenders? Student snitches bought and paid for by the ATF? And all just to see how much the cigarette manufacturers would owe the government four years from now.
Far-fetched? No more so than such things would have sounded when the war on drugs was originally announced many years ago. With any luck, Congress will vote down Clinton’s cigarette-tax proposal and the issue will not come up. Otherwise we just might find ourselves facing a new, intrusive threat to our health and privacy: the federal cigarette police.
Professor Ebeling is vice president of academic affairs for The Future of Freedom Foundation (www.fff.org) in Fairfax, Va., and the Ludwig von Mises Professor of Economics at Hillsdale College.
