Beyond any reasonable doubt, cigarette smoking causes more harm than good to both the smoker and the surrounding. However, people continue to smoke. Ask any adult smoker the reason behind smoking and you’ll never get a convincing answer. The truth is that most smokers start when they are young, especially in their teens, and get so much addicted when they become adults. Trying to quit cigarette smoking has become an uphill task to most smokers since the drug is readily available, very cheap, and so much addictive. Research and statistics reveal that smoking highly affects human health and greatly contributes to a significant number of deaths. Approximately 443,000 people lose their lives every year due to cigarette smoking, including roughly 49,400 deaths due to exposure to secondhand smoke. This clearly shows that indeed cigarette smoking is a disaster that needs to be contained. However, the question is how? Well, the government has been in constant search for a perfect solution to this problem and various options have been proposed, one of which, is an increase in the cigarette taxes. Again, the question is, how effective will an increase in the cigarette taxes minimize smoking? This is a very big debate with government and nonsmokers on one side and the smokers on the other side, each side giving convincing reasons why taxes should or should not be increased on cigarette. This paper captures on the same.
Most people continue to smoke despite the general belief that smoking is harmful. Most people, smokers inclusive, believe that smoking has no potential benefits. However, basic economics tells us otherwise: smokers actually benefit from smoking. This is because; money is spent in buying the cigarettes. Surely, how can a rational, well-informed individual voluntarily choose to buy the cigarettes and smoke if there are no benefits of smoking? How can one spend his/her money and take the risks involved in smoking (such as heart diseases, emphysema and lung cancer) if there are no benefits? Economically, the cost of smoking is a disaster in the society as compared to the benefits. These costs include both the social and private costs. It stretches beyond the money spent in buying the cigarettes. The society, as well, suffers from the costs of smoking. Be that as it may, the benefits of smoking cannot be underestimated. There is a lot of revenue generated by the tobacco industry, besides creation of employment to several people. To the government, cigarettes are great source of revenue due to the heavy taxation.
The government believes that an increase in the cigarette taxes will reduce smoking. When the cigarette taxes are increased, the price of the cigarette increases and smokers get discouraged from smoking. According to the law of demand, the quantity of cigarettes demanded decreases with an increase in the price of the cigarettes. Therefore, as the price of cigarettes goes up, a good number of smokers cut down their smoking, and others even quit smoking. Recent research findings reveal that the number of smokers, especially the young smokers, drastically drops when the cigarette prices are raised (Gaur 2012). An increase in price, which directly results from an increase in cigarette taxes, makes the drug unreachable, especially for many teenagers and other regular smokers.
Various literatures show that increase in cigarette taxes substantially decreases smoking. From Gallagher’s article “Do taxes really affect the consumption of cigarettes?” the determinants of cigarette consumption include the advertising ban, the 1950’s health scare, and the taxes. Of these determinants, taxes are more effective in reducing the consumption than the advertising ban and or the health scare. Therefore, “levying taxes on cigarettes would be an effective means of reducing the consumption of cigarettes.” Statistical findings also show that increase in taxes highly reduce cigarette smoking. An example is drawn from Washington State where a 60-cent cigarette tax increase in 2002 reduced the percentage of smokers to 19.7% as compared to the previous year’s 22.6%. The number of adult smokers in the state reduced by more than 100,000, despite the state’s overall population increases. From the research studies and the statistical evidence, it’s beyond any doubt that increase in taxes discourages cigarette smoking and subsequently reduces the number of smokers. Increasing the tax is therefore a good initiative for the government.
Raising the taxes on cigarettes also lowers the smoker’s incentive to smoke. This is due to the high prices. For example, if a low-income smoker spends a lot on cigarettes, he/she might not be able to meet other important obligations, and as a result, may eventually quit smoking. Cigarette is not a basic need and can be easily forgone at the expense of the basic needs like food. Therefore, with limited funds, an individual is most likely to prefer the basic needs to smoking. With high cigarette prices, the smoker’s desire, especially low-income smoker, is likely to decrease. With time, such a smoker continues to lose the desire and may even stop smoking.
As stated earlier, increasing the taxes on cigarette is a way of enhancing the economy through increase in tax revenue. Saul (2008) reports that; in 2007, the government collected approximately 19 billion from cigarettes. With increase in the tax, the tax revenue is most likely to increase and the economy enhanced. The tax revenues from cigarettes can be used in other important sectors like education i.e. in building new schools, giving out more scholarships, and even investing in research. These revenues can also make the governments to recover from a deficit. The National Conference of State Legislatures reported that the government’s increase in the cigarette taxes generated $19 billion which greatly helped in recovering the $40 billion combined budget deficits in 2009.
Besides discouraging smoking, high taxes on cigarettes is an additional source of revenue to the government. The government also saves a lot of money when smoking is reduced, especially in the healthcare sector. In cases where the medical bills are settled by the government, then, there is justification in the government’s measures that deject smoking, such as high taxes for cigarettes, due to public health insurance. Because the government pays for the medical bill, it has the right to regulate smoking and the associated expenses.
In a nutshell, increasing the tax on cigarette is beneficial and should be encouraged. It discourages smoking and reduces the number of deaths that result from smoking. It also reduces the government’s spending in healthcare, especially in treating the smokers. By discouraging smoking, the health of the nation is enhanced and the individual productivity of the citizens improved. Besides, the high taxes are additional source of tax revenue to the government. These revenues can be channeled into other important sectors of the economy thus enhancing the economic growth of the nation. Through cigarette smoking, most people lose substantial amounts of money, which can otherwise be channeled into other basic necessities. If the taxes are increased, the smokers especially teenagers and the low-income smokers, would be discouraged, their desires reduced, and might eventually quit smoking. In so doing, they are able to prioritize on the basic necessities.
While the government believes that increasing taxes on cigarettes discourages smoking, smokers believe otherwise. Most smokers argue that high taxes cannot affect their smoking in any way. The price of cigarette cannot be unaffordable and the cigarette cannot be unreachable, regardless of how high the price is. Therefore, a core group of smokers hang on to the habit. The desire to smoke and the pleasure in smoking, they believe, cannot be forgone just because of a little increase in prices. The only group that is affected by the increase in prices is the teenage smokers, and maybe, the poor people. Even for these affected individuals, the strong desire to smoke and the pleasure in smoking cannot be substituted. Instead, they would reduce the consumption on other things and save some money for the cigarettes. The number of cigarettes consumed by an individual on a daily basis may reduce; however, cigarette smoking may not significantly stop. The reason is that cigarettes contain nicotine, a substance that is highly addictive, and once a smoker reaches the level of addiction, he/she may not be able to stop smoking. Such an individual’s blood is conditioned to this drug and any attempt to do away with it subjects the victim to intolerable withdrawal symptoms. Therefore, one will continue smoking even when the prices are high.
Most smokers, especially the addicted ones, argue that nothing whatsoever can stop them from smoking. They are ready to forgo anything at the expense of smoking. That means; the consumption of other goods is most likely to decrease so that the smokers save enough money for the expensive cigarettes. More so, cigarette taxes increase by cents, and this cannot stop any serious smoker from smoking. However, at higher prices, the poor addicted smokers are at greatest risks. Because they are addicted and cannot do without the cigarette, they must find other ways of getting the drug. This may lead to risks of committing crimes such as stealing.
Increase in cigarette taxes not only affects the smokers, but also the cigarette companies, their employees, the distributors, retailers, and the nation at large. With the increased taxes, cigarette purchases fall since smokers are discouraged, and the profit margin of the cigarette companies, distributors and retailers fall. Business is all about making profit, and no company or individual would venture in a business where losses are prominent. As a result, the cigarette companies together with other affiliated companies close down and most businesses in the cigarette line lost. The end result is that jobs are lost and unemployment rate increases. No government would wish for this to happen.
Smokers also argue that the effect of the pleasure lost or the money saved depends on who settles their health care bills. If the smoker pays for his/her own health care, then cutting down or quitting smoking due to tax increase results into a net loss to the smoker. Therefore, the government should only increase the tax if and only if the smokers’ medical bills are settled by the government. In addition, smokers believe that increasing the taxes on cigarette is more harmful to the government and the society than the smokers. Smoking may be discouraged, but the government stands greater chances of losing its tax revenue especially due to decrease in the purchase of cigarettes. And because the government needs to perform all its duties, it may be forced to increase the taxes elsewhere, failure of which, the society may be forced to forgo the benefits of some of the public services that were financed by these taxes.
Besides generating tax revenue to the government, the tobacco industry is very important in driving the economy. The industry employs a lot of people either directly or indirectly. Cigarette retailers and distributors also earn their livelihood from this product. Therefore, an increase in taxes discourages the consumption of cigarette, makes the industry irrelevant, and greatly contributes towards unemployment. This is bad for the government and the society.
Conclusion
Cigarette smoking has both advantages and disadvantages to the individual smokers and the society at large. However, the disadvantages far much outweigh the advantages. This necessitates the call for a reduction or even a stop of smoking, and one of such measures is an increase in the cigarette taxes which subsequently increases the price of cigarette. If successful, then, the society stands to benefit greatly. First, the medical expenses are most likely to go down due to risk reduction and improved health of the individuals. Secondly, the general productivity of the society improves. Stopping or reducing cigarette smoking, due to increased taxes, also comes at a cost to the society. First, the tax revenues decrease due to the fact that the purchase of cigarettes greatly decrease or even comes to an end. For the recovery of this loss of tax revenue, the government is most likely to increase the taxes elsewhere, or, the society can be forced to forgo the benefits of some of the public services that were financed by these taxes. Finally, the retailers and distributors equally suffer as a result of the decrease of cigarette sales.
Works Cited
“Cigarette Taxes in the United States." Wikipedia. Wikimedia Foundation. May 2010. Web. 1 April 2012
Chaloupka, F. J., K. M. Cummings, C. Morley, and J. Horan. "Tax, Price and Cigarette Smoking: Evidence from the Tobacco Documents and Implications for Tobacco Company Marketing Strategies." Tobacco Control 11. Supplement 1 (2002): I62-72. Print. Web. 1 April 2012.
Fitzgerald, B. "NJ Lawmaker Pushes Tobacco Tax Hike." NJ Spotlight. 12 Mar. 2012. Web. 1 April 2012.
Gaur, D. C. "Hike in Taxes Lessens the Number of Smokers." TopNews Network. 2 Mar. 2012. Web. 1 April 2012.
Saul, S. “Government Gets Hooked on Tobacco Tax Billions.” The New York Times. 30 August 2008. Web. 1 April 2012.
