How cash starved governments can get help & protect our health....

Today's Post: Friday, 2-12-2010

From the United States government to local cities most governments today are now extremely pressed for cash and revenues.

Yes. Governments can cut service levels and programs; and they have been.

But cutting back on things like libraries, parks, education, programs for pregnant women and babies and preschool children, and public health and public safety cause real harm now and later than would be best avoided. Cutting back some kinds of health programs can even directly kill people and does. Cutting back on supporting mass transit not only harms people who have less money and harms the economy, it tends to increase driving and air pollution.

Governments can also increase the dickens out every possible kind of fee and they have been. Permits cost more as do traffic tickets – increasingly a LOT more – than they used to cost.

But whether young or old or less educated or less fortunate many people find these higher fees a problem because they are already themselves short of money.

Governments could raise their sales taxes by a lot and some may do so. But even though sales taxes are the easiest to be sure you can collect and tend to be fair since everyone has to pay them, doubling them or more will slow the economy and tend to impoverish people.

So that’s not a great idea either unless the taxes were very low to begin with.

The federal government and the states can also increase income taxes, particularly – at least on paper – on higher income earners. But that tends to cause collection problems and also tends to slow the economy and lower people’s standard of living if overdone.

There is some evidence that having capital gains taxes at all slows the economy and tends to prevent efficient changes in the economy by disincentivizing property transfers. It also tends to penalize people for inflation. Increasing them is an even worse idea.

Yet with virtually every part of their revenue down from the severe recession, hard pressed governments have to do something to compensate!

But since these other alternatives they have often cause as many problems as they solve and many worsen the economy besides by tending to reduce the governments’ revenues even more, wouldn’t it be nice if there were a way governments could raise more revenues without slowing the economy?

It’s not yet being used as much as it could be and should be; but there are several taxes that could be implemented that by making health harming actions cost more would not only raise the revenue the governments need but not slow the economy and would in fact increase it by sharply cutting health care costs.

It is as yet not as well recognized or used as it will be; but many kinds of food and drinks can and should be taxed for that reason.

But there is one health harming set of products that is so severe in its bad health effects it’s already been recognized to be that severe and is already taxed.

But those taxes are not yet collected by many governments or are still relatively low.

This set of products is the complete set of the various kinds of tobacco products.

Smoking causes up to 30% of ALL cancers, not just lung cancer. And its heart harming and blood vessel harming effects are so severe smoking kills far more people with those than it does with cancer. Worse, those effects happen to ALL smokers, even young ones, not just the unlucky few. In fact, just the second hand smoke caused heart damage and heart attack triggering effects are so large that many communities have found death rates from heart attacks have fallen by over 30% within a few months by passing bans on smoking in public.

THAT is severe health harm. And it raises the dickens out of health care costs too.

So if many smokers quit and those that remain smoke less, it would BENEFIT the economy.

Yet so many people would continue to smoke that governments would still continue to make a huge income by increasing taxes on cigarettes and other tobacco products.

In fact, governments are collectively leaving BILLIONS of dollars of revenue off the table and out of their income sources.

This past Wednesday, Reuters online health news ran a story titled, “U.S. would reap billions from $1 cigarette tax hike.”

Maggie Fox, their Health And Science Editor wrote the story.

She points out that just by increasing the taxes on cigarettes by a dollar a pack states would raise as much as nine billion dollars.

A group of health advocates made this point Wednesday, and said that a poll they also publicized and which was done by International Communications Research, found that a large majority of Americans would support that tax., 60 %!

The article also included this quote by John Seffrin, chief executive of the American Cancer Society Cancer Action Network.:


"An increase in tobacco tax rates is not only sound public health policy but a smart and predictable way to help boost the economy and generate long-term health savings for states facing deepening budget deficits,"

And….

"We have irrefutable evidence that raising the tobacco tax lowers smoking rates among adults and deters millions of children from picking up their first cigarette,"

The Cancer Action Network, which apparently released this information, advocates policies favored by the American Cancer Society, the Campaign for Tobacco-Free Kids, American Heart Association, American Lung Association, and the Robert Wood Johnson Foundation.

This report is available at http://tobaccofreekids.org/reports/state_tax_report

They also note research that showed a 10 percent cigarette tax increase would reduce total consumption by only 4 percent.

They estimate that 1 dollar a pack cigarette tax would prompt 1.2 million adult smokers to quit.

I find this next quote very persuasive on this point.

"In 2007, Texas increased its cigarette tax by $1 per pack from 41 cents to $1.41 per pack," the report reads. The next year, cigarette tax revenues nearly tripled from $523 million to $1.5 billion, despite a 21 percent decline in sales.”

They also are quoted as saying this.:

"Each year in the United States, smoking-caused disease results in $96 billion in health care costs, much of which is paid by taxpayers through higher insurance premiums and government-funded health programs such as Medicaid."

-- and this:

"Indeed, higher Medicaid costs are one of the reasons states are facing budget difficulties."
The average state cigarette tax is $1.34 per pack, ranging from 7 cents a pack in tobacco-growing South Carolina to $3.46 in Rhode Island.

They point out that cigarette and tobacco tax increases can fix broken budgets AND score political points with voters.

So, pass this on to the governor of your state and any of the legislators in your state that might listen to you.

Why put up with cuts in services and increases in taxes that come out of your pocket when taxing cigarettes will cut your exposure to second hand smoke and avoid these other problems or at least make them better?