of people who smoke?  Aren't excise taxes just a way to punish the poor and widen the income gap?

One more thing...

Why not ban smoking outright?  Would listing tobacco related products as Schedule I or Schedule II controlled substances not solve the problem instanteneously?

The "tough love" argument is that like sales taxes, cigarette taxes are regressive.  We have a multi-faceted tax system, which has some regressive, some progressive, and some "user fee" type taxes.  This tax is not intended to aim at the poor.  They just happen to have a strong smoking demographic.  My 10 year old daughter just chimed in -- "they should be spending the money on food anyway."

But the key here is aiming at kids, who are "poor".  It's got to start somewhere.  And a strong secondary aspect is to get people to stop smoking by making it too expensive.

The state interest?  Lower Medicaid costs in the future as fewer people smoke.  And we all pay taxes to support Medicaid.

To reduce the regressive aspects of the tax, I'd offset with a reduction in the grocery sales tax.  One of the states above did that.  And that's smart politically. 

An outright ban?  I don't think it is necessary.  The percentage of people who smoke has been declining.  I read a poll some time back which I cannot find now that a narrow majority would ban smoking outright.  But so many people are strongly addicted that I think the moderate approach is better.  And the place to start is with teens.

BTW:

Northern Ireland joined the Republic of Ireland's smoking ban Monday, and owners of Belfast pubs, restaurants and other businesses reported strong public support for the measure.

http://www.forbes.co...

I've seen a support figure of 98% for the Republic of Ireland's smoking ban after being in effect for one year: http://www.rte.ie/ne... 

I did find some interesting polls on marijuana usage.  In a 2002 poll, the question was:

"Assuming marijuana is not legalized, do you think people arrested for possession of small amounts of marijuana should be put in jail, or just have to pay a fine but without serving any time in jail?"

The results --
Put in jail  19
Just pay a fine 72 
Neither  4 

And for medical marijuana:

"Do you think adults should be allowed to legally use marijuana for medical purposes if their doctor prescribes it or do you think that marijuana should remain illegal even for medical purposes?"

Allow medical use  80.
Illegal even for medical purposes  17 
http://pollingreport...

Ban is such a harsh word.  =)  We would be making it more like a prescription drug.  We would still allow doctors to prescribe nicotine gum or patches to those with an established addiction with the goal of freeing them eventually from that addiction.  And you would have to purchase those forms of the drug from a pharmacy. 

Like illegal use of prescription drugs there would be penalties, but there is nothing wrong with that.  You break the law and you must suffer the consequences of your poor decision.  This need not be harsh for illegal users.  Though illegal traffickers of the substance would face more severe penalties as they are pushing harmful substance on the public. 

Unlike certain currently controlled substances, we have established that cigarettes are not only harmful to the individual consumer but also to non-users via toxic emissions.  In addition, as you astutely point out, the use of tobacco products puts a terrible strain on our health care system.  Further, the stimulant contained in tobacco, nicotine, is highly addictive with a severity that would put it in a class along with other Schedule II substances.  Given these perils, is it not wise to group this with substances of similar peril and control it?

As far as Mr. Estrada's argument goes, I doubt the severity of a black market in the substance.  Given the substitutes available already on the black market, nicotine would have to be priced substantially less than its competitors.  Its competing stimulants also offer a much greater utility to users.

Demand for nicotine is quite inflexible, correct?  So would a reduction in the sales tax for food really offset the burden? 

I would think that users would just spend more of their limited budget to purchase tobacco products and less on food.  Thus, the reduction of the sales tax on food would not have a substantial offsetting effect.  And the change in spending might also exacerbate the impact users have on the health care system by way of malnourishment.

Cigarette demand is relatively inelastic.  But it's actually in the same range as a lot of food products (I looked at some USDA stats).  Here's where elasticity gets tricky.  Different income groups have different elasticity levels for the same product.  If one raises the price of cigarettes, it turns out that poorer people will more likely quit than rich people.  (However, higher income/education groups smoke less.)

Will some people give up some food for cigarettes?  I imagine so.  It happens with alcohol too. But according to this paper I read, poorer consumers tend to substitute tobacco  expenditures on food, recreation and education. http://archive.idrc....  Sounds like a great trade off to me.  (The results are buried deep in the paper -- sorry about that.)

I am not sophisticated enough in my understanding of the economics literature on cigarettes to give you an answer I'd bet the ranch on.  I will say that federal food stamp policy for a long time has been -- you can't spend your food stamps on alcohol and tobacco products.  And I think most people support that (and users accept that).

I don't think too many people will be sympathetic to the argument that some people might not reduce their nicotine consumption and end up spending less on food.  There's a certain point at which I'm not willing to hand hold someone determined to kill themselves early; a kick in the butt (no pun intended --it just happened) sometimes is the mest medicine.  And most policymakers are looking for ways to restrain health costs -- including Medicaid costs.  I'd rather my tax dollars go to support poor people who are not creating their own health problems by inhaling a deadly substance.

On the opposite side -- the econ prof from South Africa who wrote the paper I referred to said something like a half billion people on the planet right now will die directly from a tobacco caused illness.

On undernourishment causing a rise in health expenditures -- obesity is a much higher health hazard, among both well off and poor alike.  I think physicians will tell you (I know mine did) that in the grand scheme of things quitting smoking is the #1 thing you can to to maintain good health;  weight control is a secondary concern relatively speaking.

So you ask a good question -- and maybe this isn't a satisfactory answer but it's the best I can do with my limited quantitative skills. 

If demand management is the key, then what price must cigarettes be in order to reduce demand to nil?  And as the study you reference suggests, should we not also couple that with eliminating all marketing (i.e. no mailers to customers, no point programs, no advertising in any form, no tobacco industry created "anti-smoking" commercials)?  Might we also require a large Mr. Yuck face (or skull and cross bones if you prefer, I like Mr. Yuck though) be put prominently on the packaging of cigars, cigarettes, and chewing tobacco?

The other problem I see with the current excise tax regime is state-to-state disparity.  This has caused consumers and certain nefarious elements to violate federal interstate commerce laws (http://www.washingto...).  Disparity in pricing amongst the states then creates the black market.  And I think that since tobacco products are legal, it only further facilitates this.  So, if taxation is the way to go, it would be best to have consistent approach across the country.  And if we could pull Canada and Mexico on board with the same program, even better!

Oh! And no thoughts on the controlled substance argument?

I'm sure someone has done the computations about what price causes nil demand at the various income levels.  Price elasticity changes as one changes price.  A 1% change at, say, 3 dollars a pack is different than a 1% change at $10 a pack.  And there is good data on quitting rates in response to the price changes that have occurred.  Gut response -- $10 a pack would drive demand way down.

There have been lots of suggestions about curtailing marketing.  As long as the product remains legal, though, there are first amendment considerations because commercial speech is protected. 

I'm not sure about lumping tobacco into a controlled category; it's a complex topic.  Using a light regulatory approach, even if one limited purchases to one person, others would go in to buy for you.  (Note: I find it annoying that I am limited in my purchases of decongestant medicine. We'll see if that anti-meth strategy works.) 

Prescription only?  Perhaps it would help to have a physician staring you down and telling you to quit when you asked for a prescription.

State to state disparities are a problem near the borders of states.  Tobacco producing states try to keep their taxes low.  One could enact a federal-only tax, with revenue returns back to the states based on consumption.

This was a great discussion.  Though, it would have been nice to have had some thoughts from the rest of the RK community.

People like drugs. Drugs make the lives of many people bearable. For many, tobacco is their drug of choice.

Banning tobacco would only create a beautiful illegal market for it. People would not only keep smoking but also go for jail for this. This is all very expensive.

It is a lot more practical just to keep it legal, but tax it high to discourage new users and to pay for the damage that current users do to their health and that of other people.

This is a much cheaper and pragmatic solution.

I'm not -- heaven forbid -- in favor of a Puritanical society.  It is a "drug of choice" for many. I just want to keep it out of the hands of minors and suggest less deadly and less addictive options.  I think you and I agree on this. 

And I believe employee health plans -- like life insurance plans -- should classify people by risk, such as smoking and body mass index.  (Just like car insurance companies use risk classes.)  Right now, for many health plans, we're paying for smokers and obese people's health costs.

(Yes, there are arguments against this -- such as genetics producing obesity-prone people.  I'm only a little sympathetic to that argument.  I come from a family with a fair number of obese people.  Those of us who work hard at it keep our weight down.)

I must say I am very impressed how smoking bans in public places have been applauded and fully accepted in countries like Ireland.

That is why making it expensive is necessary. I read somewhere, years ago, about how a study said that the age to get hooked up in the habit is about 13.

Let me share a little story from Mexico since I am a bit nostalgic. When I was a teenager there, although there are age limits for buying alcohol and tobacco, most mom and pop stores will sell you both at any age. Many parents send their 4th graders to buy them their pack of cigarettes and beer.  Hard liquor is harder to get if you are a minor, since they did take away licenses of liquor stores for violating the ban, but it was not impossible to buy them if one really wanted it.

Now this is the interesting anecdotal finding. Most of my friends didn't abuse alcohol; they practically never consumed it. But cigarettes were a different thing. Many people that I knew got into the habit of smoking and never really stopped.

Here is a horrifying example: once I went to a teen retreat and my peers were playing basketball as the smoke. And in my church's lingo, teen was people under 18; those 18 and above went to the "youth" retreat.

when I was a kid in Pa. some mom and pop stores sold cigarettes to minors.  And the same was true for what my friends abused.  Tobacco came first.  There was very little drinking in my high school (though I did not hang around with the football players, who allegedly were the drinkers).  In college, drinking exploded.  People routinely got drunk on the weekends, and it was clear some kids had an alcohol problem early on. Marijuana was thought to be cool because it was exotic or illegal, but few people stayed with it.  I knew only one person who continued marijuana use after grad school.

Drinking exploded by the time when they were college age. I wasn't in Mexico anymore, so I missed it. Friends would tell me about these drinking parties.

I just found this on Dave Barry's blog: Click on "Is Tequila Right for You?"  Very funny. It should show as a Windows Media movie.

http://blogs.herald....