Strawman arguments in the cigarette tax debate

By Aaron Rice
January 25, 2019

The Mississippi State Medical Association and numerous other groups want to see cigarette taxes increased in Mississippi. They are certainly free to advocate for that point. However, they should stop their argument at “smoking is bad for you” because their strawman arguments are vague and weak on actual data.

We agree that long-term smoking is a bad health choice. The evidence is overwhelming. Yet, our policy position on the tax issue is based on reason, evidence, and data. We reach these conclusions without bias because our only motive is representing the citizens and the Constitution.

In the response to our policy view, the MSMA authors repeatedly said that every time cigarette taxes have been raised, revenues have increased.

Yes and no. Adjusted for inflation, Mississippi is receiving the same net collections from cigarette taxes as we were in 1975. The overall revenue has increased along with the 500 percent increase in taxes during this time, but real numbers are flat. New York is collecting significantly less, adjusted for inflation, in cigarette tax revenue than they were in the 1970s. Same story in Illinois. In real numbers, revenue is down significantly in those two high-tax states.

The MSMA authors also brushed aside data on cigarette smuggling. But what do we know?

Through statistical research, we can determine Mississippi’s smuggling rate would explode to 35 percent for a state surrounded by low-tax states, something the author did not dispute. As our op-ed authored explained, “The estimate is built around a statistical model, which measures the difference between smoking rates published by the federal government for each state and legal paid sales. There are often yawning gaps between the two — the amount of cigarettes that should be smoked based on sales and the amount of smoking that actually occurs — and that difference is likely explained by smuggling.”

Simply claiming that revenue will continue to increase is not an accurate statement and doesn’t erase the numerous negative side effects that will follow such a large black market. Quoting a report from two scholars on the subject, which was published by the Mercatus Center, “Cigarettes aren't illegal, but governments have artificially raised the price of the product to such a degree that their sale and purchase now is tinged with many of the consequences of full alcohol prohibition. Thanks to "prohibition by price," people commonly smuggle cigarettes across borders, usually illegally, to evade excise taxes.”

The MSMA authors also said higher taxes result in less people smoking.

According to the CDC, while consumption of cigarettes decreased 32.8% from 2000 to 2011, consumption of loose tobacco and cigars increased 123.1% over the same period. As a result, the percentage of total combustible tobacco consumption composed of loose tobacco and cigars increased from 3.4% in 2000 to 10.4% in 2011. The data suggest that certain smokers have switched from cigarettes to other combustible tobacco products, most notably since a 2009 increase in the federal tobacco excise tax that created tax disparities between product types.

The truth is people often confuse a decline in legal cigarette sales with quitting. The number that stop smoking is smaller than that reflected in official cigarette sales precisely because of smuggling and a switch to less expensive tobacco products.

And the MSMA authors said cigarettes are addictive and they kill

We agree with the evidence. And given that, perhaps the appropriate public policy action is to lead a push to ban cigarettes, not make them more expensive? As we know, it is mostly the poor and the middle class who will end up paying this regressive tax.

And should we really use the tax code to punish people for legal behavior that the state objects with? If so, why do we limit it to only one unhealthy/risky behavior? Why not include alcohol, sugary sodas, fatty foods, and risky activities like downhill skiing and playing tackle football before age 14? The reason is that we long ago decided that a free society is made up of citizens who agree to take personal responsibility for their choices and actions. Parents are responsible to teach their children about the dangers of high places, hot stoves and sharp objects; they should also be responsible to each about the dangers of alcohol, cigarettes, and drugs.

Is there a possible free-market option to improving our health and reducing harm for consumers who still want to smoke?

In fact, there are multiple products coming online across the world that are considered “harm reducing” for consumer who still wish to legally “smoke.” In addition to e-cigarettes and vaping products, there is a product on the market in over 20 countries that “roasts” the tobacco and eliminates the combustion. The early data shows it has been highly effective at converting combustion cigarette smokers without attracting new smokers. That product is currently before the FDA seeking approval now in the U.S.

This column appeared at Y'all Politics on January 25, 2019. 


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