Forget the Cigarette Tax—Try a Democrat Tax

Thomas A. Firey Feb 25, 2015

Some Maryland lawmakers want to increase the state’s cigarette excise tax yet again. Currently, the tax is $2 a pack, tying Maryland for 12th-highest in the nation. Legislation filed by Del. Eric Luedtke (D-Mont. Co.) and Sen. Richard Madeleno (D-Mont. Co.) would raise the tax by 50% and jack up several other state and local levies on the tobacco market.

To justify the higher taxes, the lawmakers and their supporters are trotting out the same “Helen Lovejoy” arguments: do it for the children; do it for people’s health; do it to spare taxpayers.

Once upon a time, those may have been sound arguments. There are some public costs to smoking, and it’s appropriate to use a Pigovian tax to recover the costs. But tobacco taxes long ago eclipsed any reasonable estimation of the public costs. Nonetheless, today’s tax proponents like to justify increases by highlighting the expense of Medicare or Medicaid recipients dying from tobacco-related illnesses, ignoring the fact that dying nonsmoking Medicare and Medicaid recipients are just as expensive (if not more so)—and all of us die.

As for using cigarette taxes to discourage smoking, it’s problematic that a liberal government (like we supposedly have) plays such a paternalistic role (for adults, at least). Beyond that, it’s extremely unlikely that raising Maryland’s already hefty cigarette tax would result in much further reduction in smoking (especially when we remember that cigarettes are also heavily taxed at the federal level and carry hidden state taxes imposed as part of the 1998 Master Settlement Agreement). Given all those levies, people who currently smoke really want to smoke—and another buck a pack won’t change that much.

Cigarette tax proponents probably know all that already, so why do they demand more increases? Some of them, I think, are illiberal social warriors: they personally despise smoking and so they’ll use government to force everyone else to live the way the illiberal social warriors want and punish “sinful” personal choices. (There’s some class warfare in this too, given the high socioeconomic strata of tobacco tax advocates and their “downward” view of smokers.)

Other cigarette tax supporters have a simpler motivation: they want more government revenue (for whatever reason). Their testimonies, op-eds, and public comments are filled with salivating estimates of how much money government would get from the proposed increases (even though those estimates often prove wildly inaccurate and the money goes to uses different from what was promised).

If revenue is the ultimate goal, then I offer a modest alternative proposal: instead of increasing the state’s tax on tobacco, Maryland should adopt a tax on registered Democrats. After all, many of the justifications for a cigarette tax work just as well—if not more so—for a Democrat tax.

Consider:

  • Though only 17% of Marylanders smoke, 44% are registered Democrats. That means more people would pay a Democrat tax than the cigarette tax, resulting in more revenue.
  • Smokers tend to have lower incomes. In Maryland, predominantly Democratic jurisdictions tend to have higher incomes. Thus, in general, Maryland Democrats can bear higher taxes more easily than smokers can. A Democrat tax can be set much higher than the cigarette tax, producing more revenue while promoting greater income equality.
  • As some Democratic leaders point out fondly, many of America’s “really great” but costly social programs were established through Democratic Party efforts. If alleged “tobacco costs” for Medicare and Medicaid should be borne by smokers, then it stands to reasons that the “really great” social programs’ costs should be borne specifically by Democrats instead of the general taxpayer, and a Democrat tax would allow that.

For those and many other reasons, and for the public good of the country, I urge Del. Luedtke and Sen. Madeleno to shift their proposal. Think of the children, and adopt a Democrat tax.