In the fall, California voters approved the biggest increase in cigarette taxes since the state first began levying tobacco in the 1950s. Advocates for Proposition 56, which passed with a fairly overwhelming 64 percent of the vote, argued that a $2 per-pack tax hike would hurt pocketbooks enough to nudge millions of California smokers to quit, or at least to light up less frequently.For those of us who can't stand smoking, this must be a good thing, right?
When the tax went into effect in April, smokers saw the average cost of a pack of cigarettes soar from under $6 to up to $9, making California one of the most expensive states in which to buy cigarettes. But the question then: Was that enough to force smokers to kick an increasingly expensive habit?
The early data suggests that yes, California cigarette sales have declined significantly since prices went up. In fact, the drop is even sharper than the state anticipated...
Well, liberals don't really study economics, and they don't think through the policies they propose. Where do you think all that tax money from cigarettes goes? Why, it's sold to the public to fund programs that people like! So what happens to those programs when the tax money dries up?
But what’s beneficial for public health isn’t necessarily good for the state budget, at least in the near term.Translation: we'll just tax someone else to pay for Medi-Cal (socialism).
Proposition 56 was supposed to generate an additional $1.3 billion in revenue for the state to shore up Medi-Cal, the state health insurance program for low-income Californians. In the two months since the tax has been in place, the state has raised a total of $182 million, below what Gov. Jerry Brown’s administration was expecting.
“Sales are still more sluggish than had been originally anticipated,” H.D. Palmer, spokesman for the Department of Finance, said via email. ”Given that we only have two months of data, it is too early to predict a trend. If the current trend holds, we would likely make a revision to our expected decline in consumption.”
How the new cigarette tax revenue would be spent became a hot-button issue in state budget negotiations last month. Ultimately, legislators and Brown agreed to divide the new revenue between increased payments to physicians and general Medi-Cal expenses.
Palmer said that if cigarette tax revenues continue to come in lower than anticipated, the administration would need to identify an alternative revenue source or propose cutbacks to Medi-Cal.
In earlier days this was called "killing the goose that laid the golden eggs."