I can't say that this is an election-cycle conversion -- in 2002 Smith told Project Vote Smart that the cigarette tax was the only tax he would consider increasing. I can say that it's depressing that although Smith seems to understand that at the state and local level, you need revenues to pay for services, at the Federal level, where he has access to the credit card, he's had no problem voting for every tax cut and every spending increase, adding $3 trillion to the debt in the past six years ($10,000 for every man woman and child in America, and in Oregon). His press release responding to the Bush budget applauded spending, protested spending cuts, and applauded tax cuts. I would also add that if you look at his support of the cigarette tax, and his opposition to Sizemoe's 1996 property tax cut initiative, and his support of tax cuts on capital gains and for multinational corporations, it appears that he supports taxes that fall disproportionately on poor people (we might hate Sizemore and like the cigarette tax but there's no doubt cigarette and property taxes are regressive), and supports tax cuts that disproportionately favor rich people. Obviously, I agree with him on the cigarette tax. (Discourages smoking. Good thing.) But if you look at his overall record, it seems that in Gordon Smith's world, as in Leona Helmsley's, "only the little people pay taxes."

Steve, I'll take issue with one bit of that. Cigarette taxes are NOT regressive.

Cigarette taxes are voluntary. They are only regressive in the sense that the cost of cigarettes themselves is regressive. A $5 pack is more expensive to a poor person than to a rich person, to be sure, but you pay zero tax if you don't buy cigarettes.

Wonder when Senator Smith will actually address the inequalities of our tax system. I watched Smith in two different Town Hall meetings this week. He's running hard left here at home. He will rip off his moderate mask the closer he gets to DC and will join all the other Republicans who can only say, "No New Taxes."

Steve, everytime I read one of your Smith posts I learn something new. Keep it going!

Cigarette taxes are not regressive. You don't pay them based on how much you earn, but how much you buy.

That poor people buy more cigarettes may be true enough, but it's certainly not by design, but rather by circumstance. I don't like saddling the plan with such negative language, implying that backers have the intent of specifically burdening poor peolpe more. We don't sit around calling the gas tax "progressive" because rich people drive more, do we?

Ack. Kari beat me to the punch. I posted once, but typepad bombed.

Neener.

Yo Kelly, when was that news story?

Kelly wrote:

...only paid attention to what he says about himself when he's in cycle...

is it just me, or did anyone else get a mental picture of a bitch in heat yipping for a mate, any mate at all?

Anony... are you arguing that the cigarette tax is NOT a voluntary tax?

If the decision to stop smoking is so voluntary, what's wrong with what the tobacco companies do?

That's cute, but stupid. It's an argument for not regulating anything, anytime, anywhere.

Why should the government require auto companies to put airbags and seat belts in cars - when consumers could merely choose to install them aftermarket? Why should the government put stop signs at intersections - since everyone could just voluntarily stop and make sure there's no accidents? Why should the government regulate food safety - since consumers could just evaluate retailers, wholesalers, and producers themselves?

The reality is that smoking is a voluntary act. That doesn't absolve the tobacco companies from blame. They market and sell the only legal product in this country that has no safe use whatsoever.

Guns can be used safely, and alcohol and bad-for-you foods are possible to use safely by consuming in moderation. Tobacco is unsafe from the first puff.

Voluntariness has nothing to do with progressivity. A tax is regressive if it results in poor people paying a higher share of their income toward that tax than rich people. For that reason, all sales taxes, including cigarette taxes, are regressive, unless it's some kind of luxury tax. That doesn't mean we should oppose all regressive taxes that have other benefits. But it's a fact that it's regressive. A cigarette tax only applies to those who buy cigarettes, yes, but among those people, it hits poor smokers harder than rich smokers. I don't agree with anon that the cigarette tax is "designed" to hit poor people, in the sense that that's the GOAL of it, but it does have a regressive effect.

Not so different from the state lotteries. (Although those have also been described, perhaps more accurately, as "voluntary taxes on people who are bad at math.")

What double dealing, Chuck? This is EXACTLY an attempt to recoup the health costs of cigarettes, directed exactly at the problem. Both smokers and children drive public health care costs. You can't rightly charge the children, and smokers are in fact not coerced to smoke. It's a no-brainer. I can't fathom how people don't see the obvious connection.

AIDS? Wha?

Voluntariness has nothing to do with progressivity.

I suppose we could argue that until the cows come home, it's a matter of definition.

The basic fact remains that a cigarette tax is a voluntary tax. People choose to smoke. They choose to buy cigarettes. They choose to pay the tax.

Politics is the art of the possible.

Healthy Kids is being financed by an increase in cigarette taxes because it is the only revenue measure that might get the three-fifths supermajority on both houses in order to pass. Discussing the "regressive" effects is an exercise in intellectual autoeroticism if you want the program at all.

I'll get more excited about regressive taxes when progressives take on the growing number of shameless "user fees." These are the most regressive taxes of all. deliberately designed to narrow the tax base and heap the burden of paying for a serve on the smallest possible number of people.

From college tuition to entry into public parks, user fees deliberately shift the tax burden down the income scale and price thousands of people out of the market -- deliberately, callously.

I understand the Libertarian indifference to high fees. Their selfish Randian "philosophy is simply, "I've got mine jack, you get yours."

But where is the progressive outrage?

Only Peter DeFazio seems to get it.

Even assuming for the sake of argument that there is some de minimis level of tobacco use that does not create a health risk, history shows that very few tobacco users remain at that level. Most progress rapidly to escalating usage levels and addiction.

Alcohol use in moderation, especially wine drinking, is believed (and the best current science supports this) to confer some modest health benefits. Alcohol, while it is addictive to some people and abused by others, certainly has a better track record than tobacco in terms of millions of people maintaining moderate usage over decades.

Both alcohol and tobacco exhibit elastic demand -- when the cost (including taxes) goes up, sales go down (especially among teenagers and others with less pocket money to blow on these products). Thus, in addition to raising money for useful state programs, these taxes serve the salutary purpose of reducing the number of young people who take up smoking, and encouraging others to cut back (even if they can't quit).

There is nothing to be ashamed of in using tobacco taxes to keep kids healthier. I think it's a great initiative, especially taking into account that the taxes themselves will keep more kids from taking up smoking in the first place.

Posted by: steve novick | Feb 21, 2007 10:42:18 PM

By that line of reasoning, any flat fee is always regressive. So the price of cheeseburger at McDonald's is a regressively price item, because it takes a bigger chunk out of a poor person's limited paycheck than a millionaires income. So we should force regulations demanding that all prices for everything be on a means tested sliding scale? Even on an excise tax that is used to offset healthcare costs by taxing something that is one of the leading causes of healthcare expenses?

While technically you may be accurate in parsing it, I have zero sympathy for the regressive aspect of taxes on cigarette smoking. Cigarette smokers (poor or rich) are huge drains on healthcare resources, and is something that should actively be discouraged, as an excise tax on wasteful on voluntary expenditures. If a regressive tax on something that is harmful and a huge drain on public expenditures can be used as a budgetary offset to do something good, like children's health coverage, I am all for it.

I am empathy for people who struggle to quite, I have zero tolerance for people who complain that taxes on cigarettes is a bad thing or harms poor people who smoke. Why don't we subsidize meth for poor people then, after all, the cost of meth is regressive?

Same basic argument, and one I resoundingly reject.

Posted by: Bruce | Feb 22, 2007 7:52:09 AM

Easy, putative damages, leveled against drug dealers for the harm caused by the drugs they deal, and as a means to try and recoup SOME of the public costs associated with dealing with said harm is the basis for the tobaccos settlements. It has nothing to do with wether smokers should likewise hold some level of culpability for the costs they force onto the public dime as well for something they voluntarily did.

Also, IIRC, the other basis for the tobacco suit was that the drug dealers (i.e. tobacco companies) were deliberately misleading the public about the harm their product did. This was not about a smoker who started in recent years (post mandatory health disclaimer labeling and such) but someone who was enticed by drug dealers to begin taking their drugs.

ugh...

I am empathy for people who struggle to quite

should read:

I have empathy for people who struggle to quite

Novick says, "A tax is regressive if it results in poor people paying a higher share of their income toward that tax than rich people. For that reason, all sales taxes, including cigarette taxes, are regressive, unless it's some kind of luxury tax."

I would disagree with that. I think there is a middle ground or gray area between progressivity and regressivity, where a tax is basically flat.

When I think of progressive, flat, and regressive taxes, I'm thinking about the actual rates applied to different income levels and also the total amount collected from different income levels. I'm not thinking as much in terms of percentage of disposable income going towards paying a tax.

So a sales tax or cigarette tax is't really regressive, it is a flat tax because there is only one rate applied to everyone equally. If you exempt basic necessities from the tax like rent, food, medicine, clothing, etc, then it essentially becomes more like a luxury tax. The richer you are, the more stuff you buy, and the more tax you are going to pay. If you are poor, you are not going to spend a whole lot on unnecessary items. So in my mind this kind of sales tax would not be regressive, it would basically be flat or even slightly progressive.

To argue that cigarette taxes are bad because they end up being regressive because poor people tend to smoke more cigarettes is a really short sighted and myopic way of looking at things. Not every tax has to be steeply progressive to be moral, have value, and be a good idea.

There is value in making cigarettes more expensive so fewer teenagers start smoking and more people have added incentive to quit. Also, since smoking causes a lot of health problems, it makes sense to have a tax on it linking it to health care programs.

A similar idea would be to have a carbon tax, making fossil fuels more expensive and renewable energy and energy efficiency more cost effective. Depending on how you look at it, you could say a carbon tax is regressive because it's not progressive. But in reality it's a flat tax that people pay semi voluntarily based on how much fossil fuel energy they choose to consume. It serves a societal purpose in giving people an economic incentive to vote with their dollars for more fuel efficiency and renewable energy.

If progressives are going to draw a line in the sand and say any kind of consumption tax like a sales, cigarette, or carbon tax is beyond the pale and verboten because it's not as steeply progressive as an income tax, you're going to lose my support.

You can still have a tax system that overall is highly progressive when you take a look at the big picture including the effects of the income tax and other taxes. For progressives to insist that every single tax in our tax portfolio has to be steeply progressive is really shooting ourselves in the foot in my opinion.

When I think of progressive, flat, and regressive taxes, I'm thinking about the actual rates applied to different income levels and also the total amount collected from different income levels. I'm not thinking as much in terms of percentage of disposable income going towards paying a tax.

Well, perhaps you are, but that is at best an idiosyncratic definition of progressive taxation.

For progressives to insist that every single tax in our tax portfolio has to be steeply progressive is really shooting ourselves in the foot in my opinion.

I'm not sure anyone here has said that.

despite my own responses to the question, I think zman actually has it laid out correctly.

Can we agree that the cigarette tax is a flat tax with a circumstantially regressive effect?

I agree with torridjoe in his assement of zman's post upthread. zman hits it dead center.

Here is a nice summary from the UK of the generally understood meaning of tax justice and progressive taxation.

Sorry, but a sales tax is not a flat tax. A flat tax is one where everyone pays the same percentage of their INCOME. A two-dollar-a-pack tax on cigarettes represents a larger share of the income of someone making $20,000 than it does of someone making $200,000. Therefore it is regressive. Period. Think about it -- what if you just applied a tax of $2000 per person to everyone? That is not "flat." It's regressive. Hits the poor harder than the rich. There is no real difference, conceptually, between that and a two-dollar-a-pack cigarette tax, except that the cigarette tax happens to only apply to smokers. Within the community of smokers, it is clearly regressive.