Social taxes will inevitably just be taxes
The increase in tobacco taxes here today won't bring complaints from most people in the community because the majority of people don't smoke. And the complaints of those who do smoke will likely be ignored by most people.
That is unfortunate because even those people who do not smoke will likely pay the price for the increased taxation on tobacco products, both today's increase and past ones.
The reason is the phenomenon of diminishing returns.
Tobacco products have become a favorite target for special interests seeking funding. While general tax increases tend to be resisted by many people, the same is not true of taxes on smokers.
Because smoking is now widely seen as both being unhealthy and a nuisance which repels nonsmokers, many people think it is just fine to tax smokers as much as the government wants. In fact, nonsmokers often see it as a way to discourage a bad habit and to make their air cleaner.
The idea is that smokers will eventually be forced to stop smoking because it will simply be too expensive. And it may be working as there has been a steady decline in smoking over the years, likely at least partly due to the cost of the habit.
The latest tax increase, for example, will raise the average price of a pack of cigarettes to around $8. That is a lot of money, especially for someone who smokes a pack a day or more. Even other tobacco products like cigars and pipe tobacco have become much more expensive.
While the high cost of smoking is bad news for smokers, it has been good news for special interests that get the money from the taxes. For example, the current increase of 62 cents a pack is intended to help fund Arizona's KidsCare health care program for children.
But here is where the phenomenon of diminishing returns comes in.
If the theory works that this will discourage smoking and there make Americans healthier works, then that means less revenue from tobacco taxes. That means, in turn, less money for those benefiting from tobacco taxes. Or does it?
Does anyone believe that these special interests will simply go away? No, they will look for somewhere else to get the tax revenues from, perhaps a tax collected from general taxpayers.
That is the problem with taxes that are used as both a revenue raiser and a social tool to encourage or discourage behavior. Eventually they just become a tax that we all end up paying.