Whichever option the WHO ends up backing, “they’re both two big, bad ideas,” said Daniel Mitchell, a senior tax policy fellow at the Cato Institute. Free-market tax policy analysts such as Mitchell and Williams have long argued against such taxes on tobacco, saying they are regressive, ineffective, and counter-productive.
Cigarette taxes hit low-income people. According to the Centers for Disease Control and Prevention, nearly one third of Americans earning less than $15,000 per year are smokers, compared with only 11 percent of those earning more than $50,000 annually. Since cigarette taxes are fixed and not based on ability to pay, they necessarily consume a higher percentage of low incomes.
Critics also argue such a tax increase will not generate more revenue, but push more sales to the black market and counterfeit cigarette producers.
“It’s already huge problem,” Mitchell said. “In many countries, a substantial share of cigarettes are black market or counterfeit. They put it in a Marlboro packet, but it’s not a Marlboro cigarette. Obviously it’s a big thing for organized crime.”
By some estimates, counterfeit cigarette factories in China churn out 400 billion cigarettes annually.
The other concern is mission creep. Tobacco, Mitchell says, is easy to vilify, making it an attractive beachhead from which to launch future vice tax initiatives.
WHO says the “global tobacco epidemic” kills nearly 6 million people each year; 600,000 of these are people exposed to second-hand smoke.”
read via freebeacon.com
BY: CJ Ciaramella
September 27, 2012
submitted by GFCleary