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The polls show that Amendment 35 stands a good chance of passing this year. That should be no surprise, since taxes that other people pay are the best kind.
Amendment 35 would raise the state tax on cigarettes from 20 cents a pack to 84 cents, and double the tax on other tobacco products from 20 percent to 40 percent of the suggested list price. The resulting extra revenue, estimated at $175 million a year, would go to a variety of programs, most of them health-related.
Primarily, this is a tax on other people,
because
smokers are very much a minority of the population.
According to the federal Center for Disease Control, in
2002 only 20.1 percent of adult Coloradans were smokers. So
about four out of five Coloradans will get whatever
benefits this tax provides, without paying a nickel. Little
wonder it's a popular proposal.
Further, in these Republican times, an increased tobacco tax fits right in, since smokers tend to come from the lower economic rungs. The National Household Survey on Drug Abuse conducted a survey in 2000, and found that
35 percent of persons with total combined family
incomes of less than $9,000 reported smoking cigarettes
during the past month, compared with 29 percent of those
from families with incomes between $20,000 and $39,999, and
19 percent of those from families with incomes of $75,000
or more.
In other words, a tobacco tax, no matter how noble its purpose, is a tax on a poor minority.
But there's the argument that the health costs of smoking result in governmental costs, and society should try to recover those costs through taxation. I've read that each pack of cigarettes leads to $7 in increased government spending, primarily for health care for smoking-related diseases. I've also read that it saves up to $9 in spending, since smokers tend to die sooner and quicker, and that reduces pension and hospital costs.
It's very difficult to find any honest economic
analysis. For some time, I've thought it would be fun to
try, by writing a book called Suppose Everybody
Quit.
The effects would be major, since tobacco has
been major factor in the American economy since long before
Columbus arrived. How would governments -- local, state,
federal -- cope with lost tax revenues? What jobs would
replace those in the tobacco industry? Where would big
slick magazines turn for ad revenue?
And, where would those self-righteous purifiers focus their attention next? Some other addictive unhealthy product, no doubt -- my nominee, given general American obesity, would be the fat in fast foods.
But that's another issue. Back to Amendment 35 in Colorado. The proponents argue that cigarettes are too cheap in Colorado. This encourages smoking, and we're not keeping up with our neighbor states.
However, the median adult smoking rate for all 50 states is 23.3 percent; in Colorado, it's 20.1 percent. In other words, even with our low tobacco taxes, fewer people smoke in Colorado. If there's an inverse relationship between the tax rate and the smoking rate, they haven't demonstrated that it works here.
Further, if our taxes are lower than those of neighboring states, their residents will be tempted to come to Colorado to buy tobacco. We get the tax money; those states get the costs. Plus, those nicotine-addicted shoppers may make other purchases in Colorado, resulting in increased sales-tax revenue. It's a form of tourism.
Mere facts, of course, will not change anyone's mind about Amendment 35. After all, it raises money from an activity that no one approves of, and it spends the money in places that definitely need it, like children's health care and medical assistance in general.
In fact, it's guaranteed to go there because it's a
constitutional amendment and thus the politicians
can't spend the money on something else.
That's another reason Amendment 35 is popular -- and a reason to be skeptical, since we seem so fond of amending our state constitution in ways that lead to dire, if unintended, fiscal consequences.
But why worry about that? We can instead celebrate this as one of the rewards for living in Colorado. Where else can you feel wholesome and progressive by supporting increased taxes on a poor minority?
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