Sunday, August 12, 2007

Tobacco Taxes Cut Smoking

So runs the entirely unremarkable story from USA Today:

Higher state taxes on smoking are producing sharp declines in tobacco consumption in the United States, just as Congress considers a huge federal cigarette tax hike, USA Today reported in its Friday editions.

The newspaper, conducting its own analysis of taxation and consumption figures, said the degree of decline in smoking appears to be tied directly to the size of the tax increase.

For example, cigarette sales fell 18 percent in North Carolina last year after the state tax was raised in two steps to 35 cents from a 5 cents, the newspaper said.

In Connecticut, per capita consumption of cigarettes has fallen off 37 percent since 2002 while state taxes have increased from 50 cents per pack to $1.51, according to the newspaper.

But in South Carolina, which has kept its lowest-in-the-nation cigarette tax at 7 cents since 1977, cigarette consumption has fallen only 5 percent since 2000, USA Today said.

Well, yes, of course higher taxes reduce smoking. It's not just what they're meant to do, it's what any half literate person would assume they do: tax an activity and you get less of it.

However, we might actually want to go further. Taxing capital means less capital invested: taxing work means less work performed. As long as people are happy to accept both sides of this, that taxing desirable things causes less of them, as well as taxing undesirable things produces less of them, then I'm happy.

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