How Obama’s Tobacco Tax would Drive down Smoking Rates

How Obama’s Tobacco Tax Would Drive Down Smoking Rates

Obama’s proposal to single out tobacco users, and raise a tax on the products they use, is actually a plan to get money for the government. In The Washington Post, the proposal seems like an excellent idea because you are blinded by the so-called “benefits,” but there are far more flaws in the former president’s plan than what initially comes to the eye. Doubling the tax on tobacco will not innocently “prevent children from smoking, and fund a universal Pre-K program” like the article states, but wrongfully increase the tax only tobacco users pay, negatively affect the tobacco market, and force tobacco users and kids to find cheaper alternatives to tobacco.

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“We estimate this would result in at least 230,000 fewer kids smoking than would have smoked tobacco tax does not go into effect”, however, this isn’t true. Increasing the tax will only drive kids to other things such as marijuana.

Regardless of the tax on tobacco, there are other ways for kids to smoke. Nearly one in three people have tried an illegal drug, according to TheConversation.com. Comparatively, cigarettes are a much better alternative than smoking marijuana or consuming other drugs/narcotics. The tax would be detrimental to the economy, rather than beneficial. The tax would increase the revenue the government receives from each tobacco item sold, but there will be so much fewer products being purchased because of the price increase. Because of supply and demand, the tax would cause buyers of tobacco to find another alternative. Unless however, the elasticity of tobacco was vertical, but it is not. “Fortobaccoproducts, priceelasticityis usually less than one ortobacco demand is price inelastic.” (Worldhealthorganization.int)

When the price begins to increase,tobaccoconsumption starts to decrease by a smaller percentage compared to the price increase. The inelasticity of tobacco is pretty unexpected, and most people are probably even unaware because the tobacco industry has been around for as long as it has. Throughout the article is repeatedly talk about ‘driving down the smoking rates’ and decreasing the number of underage smokers by 5 percent. Although the decrease in underage is a fringe smaller than the percentage decrease in older people, the decrease is hardly worth it. Besides the underage consumers, the government does not have the right to punish, if you will, the consumers in the tobacco industry. In my opinion, and most other’s opinion (I assume), increasing the tax rate for cigarettes is not only detrimental because of the price increase for smokers, but the alternatives they will come up with to satisfy this “need”.

All in all, increasing the tax is not going to stop cigarette smoking, and will hardly decrease the number of smokers. In fact, I don’t believe the decrease in smokers is large enough for this to be the right answer. While inflation does cause the demand of a good to decrease, something such as tobacco products will not seize due to the tax raise. For me, if I want it and I can still afford it, I am going to have it. The article suggests the number of cigarettes smoked by one individual per day has gone down since the tax has increased. However, reading a little more into the article and examining the CBO data given, I would have to conclude the same assumptions as Patricia A Cavazos- Rehg. Rehg says the possible decrease in the number of cigarettes being smoked per day could be a result in health problems or advice from “influential people”. While I obviously have a biased view, I think it is quite interesting that new smokers were not near as “affected” by the tax increase as “old smokers”.

However, I would like to conclude the decrease in “old smokers” stems from health issues, etc. Taxing tobacco and other toxic products are not a bad thing. I believe it is good in some aspects, but then again you have to consider how much people are willing to dish out for the things they crave. Raising a tax on fast food may be the answer America needs. However, I feel as if I see an increase in the price of food every day and that hasn’t stopped millions of Americans from dining out every single day. The cost of living gets more expensive by the second, but I would almost guarantee the amount of debt Americans are in, is also rising. Not only did tobacco taxes “slightly increase”, they nearly doubled.

To me, this seems uncalled for and more so why I think this is some type of “government scam”. It’s all about getting more money for the government. Thinking about what Obama thinks he will get from this, brings Michelle Obama to mind as well. When I was in about the seventh grade, I started noticing changes in my school food. Half of my food didn’t look edible, but this a result of Michelle Obama trying to have healthier meals at schools and such. What did we actually gain from that? Nothing in my opinion. American’s”adults and children are still obese. You can still pack a lunch full of junk for your child.

Basically, what I’m saying is that taking something away or increasing the price doesn’t eliminate people from doing it. It just brings more issues to the table when it comes to money. Most of us Americans have enough issues with money WITHOUT the government raising the tax on everything we consume. The economic policy this article relates to is a fiscal policy. A fiscal policy is changes in government spending or taxation. In this case, government taxation has been highly adjusted. With something like a tobacco product and fiscal policy, you have to automatically assume this makes people better off. Why wouldn’t increase the taxes on tobacco make people better off? Well, it’s when you consider what’s better. Their health? Their amount of spending? It’s both negatively and positively affecting people. In this case, I would consider if the good outweighed the bad. It doesn’t. The decrease in the number of smokers is not high enough for this to be a sufficient move for our economy. This fiscal policy will obviously affect the market equilibrium due to the amount in the increase, but this does not keep people from finding alternatives.

To conclude my reflection on this article, I believe the fiscal policy being imposed on tobacco will not result in anything “too good” for our economy. While the idea of increasing the tax seems logical, we as people do not have enough willpower to let a small some odd difference of money affects us from buying something. People my age will still smoke tobacco, or find alternatives to that. People forty years older than me will still smoke tobacco, however, the number of cigarettes “old smokers” consume now, doesn’t seem relevant.

Works Cited

  1. City Name: Name of Publisher, Year. Type of Medium (e.g. Print).
  2. “Article Title.” Journal Title (Year): Pages From – To. Print. http://theconversation.com/many-people-use-drugs-but-heres-why-most-dont-become-addicts-35504
  3. http://www.who.int/tobacco/economics/2_2estimatingpriceincomeelasticities.pdf
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