Wednesday, July 12, 2017

The Silver Lining's Dark Cloud

When it comes to smoking, liberals believe in economics--tax it more, you get less of it:
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.

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...
For those of us who can't stand smoking, this must be a good thing, right? 

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.

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. 
Translation:  we'll just tax someone else to pay for Medi-Cal (socialism).

In earlier days this was called "killing the goose that laid the golden eggs."


Pseudotsuga said...

And then they'll find themselves facing what Robert Heinlein ironically called "bad luck."

Ellen K said...

Do you think the State of California will resurrect Ronald Reagan's old Chesterfield ads?

Ellen K said...

I remember when the Texas lottery was pushed as a way to fund public schools. I don't think we've seen a dime of that.

Mike Thiac said...


A few years back I was in a discussion with a liberal friend who was very supportive of legalized week because it would fund, “roads, bridges and schools.” Right.

I made multiple points.

1. We’re both from Louisiana and I reminded her when Edwin Edwards proposed the lottery and casino gambling he said it would fund “roads, bridges and schools…” Well, we’ve had gambling for almost a quarter century and our roads still suck, our schools still suck, and many of our bridges are unsafe.

2. “Roads, bridges and schools” have funding mechanisms already (e.g. fuel taxes). Where did that money go?

3. Weed has a distro network and it’s going nowhere. They simply will have to adjust to competition.

4. I reminded her, “Robyn, in 5-10 years another politician will come forward with a cure all to fund ‘roads, bridges and schools.’ Robyn, when that happens, please remember this conversation.

Mike Thiac said...


On smoking, coming from a family where almost everyone smoked cigarettes, I was very turned off to the habit. That being said, I’ve become more libertarian in this (and other issues) and I love a good cigar or pipe. If you are a bar owner and want to permit smoking in your place, that is your business. If you’re a consumer, you make the decision if you want to go where smoking is permitted or not.

Now a point I would make with California’s latest cure all by screwing smokers. One of the biggest lies liberals put out is, “We want people to quit smoking….” There are 43 billion reasons a year they don’t want that to happen.

But California has hit the limit for people. At some point they will take no more. Not that they will quit, but they will take alternative means to get cigarettes. They will go to the Indian reservations, if the live on the border they will got to Nevada towns, etc. I know one retired officer in Houston, originally from New York. Every two weeks he sends a package to one family member, containing two dozen cartons for a dozen family members and friends. They pay him 5 bucks a carton for his troubles and they will save money with NY taxes.

So yes, the smoking will continue, only the state of CA will, again, cut off its nose to spite its face.

Ellen K said...

One wonders what would happen if the state of California started taxing weed as heavily as they do tobacco? Would a new wave of born again libertarians emerge from the tarpits of La Brea? Here's the part that might be amusing-at some point tax revenue from tobacco will become so low California will be FORCED to consider more and higher taxes on weed. At that point, liberals will suddenly realize how government works.