Thursday, December 15, 2005

Do smokers cost the state money?

According to local pro-smoking ban media outlets, smokers cost the state healthcare system big money. But is that really the truth?.......Not according to these links here:

Excerpts from white paper published by taxpayer advocacy group:

Currently, smokers pay a 48 cent a pack tax plus a “distributor license fee” that is paid by wholesalers of tobacco products. Federal taxes on cigarettes amount to another 39 cents a pack. In addition, smokers are currently funding the tobacco settlements across the country, amounting to hundreds of billions of dollars. Update: In 2006 state of MN ordered an additional $.75 "fee" per pack of cigarettes, and in 2009 the federal government added an additional $.62 per pack. Bringing MN & federal tax paid by smokers to $2.24 / pack.

According to a study published in the Journal of the American Medical Association, the societal costs of smoking amount to about 15-24 cents a pack in 1986 dollars, or 27-43 cents a pack in 2005 dollars. Those costs are obviously substantially less than the taxes charged by the state and federal governments and being paid for by smokers through the tobacco settlements—amounting to 64 cents a pack in 1998. This year alone the state is getting about $200 million in tobacco settlement dollars from smokers, adding up to $1.6 billion paid into state coffers since 1998. Tobacco products are also subject to the 6.5% sales tax.

“Smokers are getting reamed already,” said David Strom. “Blue Cross and the tobacco tax advocates are smoking something if they are trying to argue that smokers aren’t paying their way already. They are already paying about $1.60 a pack in direct and indirect taxes to the government per pack.”
“Compared to the high-end estimate of social costs per pack of cigarettes put out by the Journal of the American Medical Association of 43 cents a pack, smokers are subsidizing non-smokers to the tune of over a $1 a pack. Adding another 75 cents a pack is highway robbery!” said Strom.
Minnesota smokers now subsidize non-smokers healthcare to the tune of $1.81 per pack.

Governments therefore rely on smokers to subsidize its insatiable appetite for higher and higher taxes.....while anti-tobacco activists lie to all of us in claiming that smokers don't pay their fair share.

Update: New study confirms non-smokers, and those who live longer are a higher cost burden to society.

Update: 6/14/2012 CBO Report "Reducing Smoking Would Raise Medicare, Social Security Spending"

Read more:


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