If the loose tobacco tax saves lives of the poor, will taxes have to be raised on nonsmokers?Someone has been posting questions here about an increase in the tax on loose tobacco. According to this person, this tax will mainly affect the poor. This person claims that all the poor use loose tobacco. I know that is not true, because some poor persons do not smoke. However, I concede that poor smokers are more likely to make their own cigarettes than rich smokers are, and that rich smokers are buy pre-made cigarettes than poor smokers are.
Here is my question:
If the increased cost of obtaining loose tobacco decreases the amount of tobacco that poor persons can smoke, and therefore saves the lives of a large number of poor persons (who would otherwise die due to smoking), so there are more poor persons alive, what financial effect will this have on the government? For example, will the government need to raise taxes on middle class nonsmokers to pay for welfare benefits for the poor smokers who would otherwise have died from smoking? Or will the government be able to pay for those welfare benefits with the money raised from the tax on loose tobacco?
chatsplas
Well it's a long term process and by the time the benefits start showing you'll be dead or in a home and won't be taxed.
A M Frantz
Oddly enough, the long term effect may well be to increase slightly other tax rates, as you suggest. While a great deal of money, including a great deal of public money, is expended on treating the diseases resulting from smoking, the fact that smokers die earlier means that smokers ultimately draw less in medicare payments and substantially less in Social Security. So smoking actually is a net benefit to the tax coffers even without tobacco taxes, according to most studies.
Max Hoopla
Reduced health care costs will compensate for the reduced tax revenue.
PassionWink
The mostly like scenario will be as smokers decrease in size, the more the government will continue to raise the taxes over time to keep the same amount of revenue coming in. It's very likely they will eventually get taxes so high that no one will smoke or be able to afford it. When that happens, look for them to increase taxes on sugar, alcohol, chocolate, coffee, tea, soft drinks and fast foods. They got away with increasing the tax on loose tobacco by over 2100% in one year. Probably the highest increase in taxes in history. But if they got away with it once, they'll eventually do it again, on your "sin" of choice. One day, only the rich and wealthy will be able to afford to be "free", in the land of the free. The rest will be working for the government. Basically, not much more than a slave. The more taxes we have, the less freedoms we have.
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