Open Letter to the Distinguished Members of the 110th Congress concerning the proposed federal cigarette tax increase
April 30, 2007
From: David W. Kuneman
Director of Research, ( non-compensated)
The Smoker's Club, Inc.
http://kuneman.smokersclub.comDistinguished Members of Congress:
Concerning the upcoming legislation to hike the federal excise tax on cigarettes, first, I want to remind you that similar state ballot initiatives to fund children's health care, in both California and Missouri, were defeated in last fall's general election. Cigarette taxes are apparently becoming unpopular even with the nonsmoking majority, and most noteworthy, in these two states whose voters represent the full spectrum of different cultural attitudes towards smoking.
My main concern, however, is that after decades of research by the major manufactures, the carcinogenic impact of cigarette tar, as measured by mouse skin-painting experiments, has declined by a wide margin. (1) We are not certain that this decline in the carcinogenic impact of tar will ultimately lead to lower rates of smoking-related cancer among smokers, but many of us believe that it is more likely that it will, than that it will not.
Further, we do not know if this is also true of the smaller manufacturers' products, as defined as "nonparticipating manufacturers" by the 1998 Tobacco Settlement. Considering the years of research it took to develop cigarette technology which produces tar less likely to cause cancer in skin-painting experiments, it is more likely than not, that the smaller manufacturers' brands do not utilize this technology as effectively and some cases perhaps, not at all. If so, then taxes on cigarettes interfere with consumers' freedom to exploit these potential health benefits associated with smoking the products made by the major manufacturers, because this excise tax hike will drive more smokers to consume these potentially more dangerous, but cheaper brands more often.
In addition, more smokers smoke bootleg cigarettes, roll their own, and even resort to growing their own when cigarettes become more expensive, and these may also more carcinogenic that the major brand products they replace. While it will be three of four decades, before we can measure the impact of bootleg, home grown and home rolled cigarettes on smokers' health, it is more likely than not, that it will indeed turn out to be the case that these alternatives are more dangerous.
Congressional Research Service economists have already told you, at least twice (2) and (3), that smokers already pay enough federal and state excise tax to offset their own health care costs. While it may be tempting to impose this tax to provide health care for children, the public is becoming increasingly aware that our healthcare system is wasteful, inefficient, and sometimes fraudulent.
Demanding that our healthcare system clean up it's own "act" would probably be more successful at fulfilling the medical needs of our children than this tax. Throwing more money at this problem will only encourage more waste, and fraud. Indeed, despite spending more that twice as much of our GDP on health care as other developed nations, we have the lowest life expectancy of all developed nations. Therefore we should already know we cannot "buy" our way to better health care.
On the other hand, the public is also becoming increasingly aware that smokers already pay enough taxes to offset their own health care costs despite boisterous, but unfounded claims by antismoking groups. All federal laws should be based on not only the best available, unbiased evidence, but also on fairness; otherwise, the public develops distaste for the law, and for those who voted for these laws.
In 1989, Canada passed the Tobacco Products Control Act, which among other things, imposed a $3.86 per pack excise tax increase on cigarettes. In 1994, Ottawa reduced this tax significantly because cigarette black market racketeers were committing violent crimes, and overwhelming Canadian officials' law enforcement attempts. It should also be noted that this tax did not reduce Canadian smoking rates. In fact Canadian teen smoking rates increased during this period, partly because the Canadian government was unable to regulate who bought bootleg and black-market cigarettes. In the end, this proposed tax will burden our law enforcement officials who need all their resources to protect our nation from the ever increasing threat of global terrorism.
Some of you may believe this tax will help cut adult and teen smoking rates throughout the USA. I have personally researched this. Overall, states with high taxes do not have statistically significantly lower adult and teen smoking rates than states with low taxes. (4) and (5) Indeed, since the year 2000, more than 40 states have enacted cigarette taxes averaging over one-dollar, and yet reports find the overall national teen smoking rate has remained unchanged.
While many citizens, believe it is justifiable for our government to increase revenue by taxing the rich, few believe taxing hardworking law abiding citizens at the lower end of the socioeconomic scale is the right thing to do. Yet according to the National Taxpayers Union, "those making less than $30,000 per year shoulder 60 percent of the burden of tobacco taxes, while those making over $100,000 per year bear just 1-2 percent".(6) In the end, this tax will more often harm the finances of the parents of the very children you are trying to help, than those who can afford adequate health care for their children.
For these reasons, we at the Smoker's Club, INC. are opposed to this excise tax hike on cigarettes.
Respectfully Submitted,
David W. KunemanReferences:
(1) Journal Now, Special Report: RJR RJ Reynolds Tobacco-Lost Empire Chapter 20, part 2, Tursi, et.al. http://extras.journalnow.com/lostempire/tob20b.htm
(2) CRS report #94-214E, Cigarette Taxes to Fund Health Care reform: An Economic Analysis, Gravelle, et. al. not available online
(3) CRS report # 97-1053E, The Proposed Tobacco Settlement: Who Pays for the Health Costs of Smoking? Gravelle, et.al. http://www.law.umaryland.edu/marshall/crsreports/crsdocuments/97-1053_E.pdf
(4) Do tax hikes cause adult smoking rates to drop? Kuneman, http://kuneman.smokersclub.com/excisetax.html
(5) Do cigarette excise tax cut teen smoking? Kuneman, http://kuneman.smokersclub.com/taxandteen.html
(6) National Taxpayers Union policy paper # 115, May 1999 http://www.ntu.org/main/press.php?PressID=324
Governments Routinely Pay for New Spending by Taxing the Poor
National Center for Policy Analysis report #300 ,Taxing the Poor