Federal Cigarette Tax Increase will Reduce PA Tax Collections by $140 Million

A new report from the Tax Foundation looks at the cost of the recent federal tax hike on cigarettes, an increase of 39 cents to $1.01 per pack, state by state.   The analysis finds that Pennsylvania smokers will pay $272 million in additional taxes.  However, because of a decline in cigarette sales from the higher tax (or rather, a decline in reported, taxed cigarette sales), the state will lose $140 million in revenue. 

This at the same time Governor Rendell is proposing a state cigarette tax hike of his own, to help fill the budget gap.  Even without a tax rate increase, revenue from the state cigarette tax has been declining - from $856 million in 2003-04 to an estimated $782 million in 2008-09.

This on the heals of a state report that state lottery revenues have been stagnant over the past few years, and counties with a slots casino have seen lottery sales decline - a trend likely to be problematic as additional casinos open.  And as mentioned previously, it is still unclear whether the slots revenue will be enough to provide property tax "relief" this year at all.

All in all, it doesn't look like taxing the vices of (mostly poor) Pennsylvanians is paying off.

Smoking ban is bad for business, say casinos

Pennsylvania's slots casinos are complaining that the recently enacted state smoking ban is hurting their revenues (we told you so) and are asking that their exemption be increased from 25% to 50% of the casino floor.  Since about half of slots revenue goes to the state in taxes, they will likely get their exemption.

Meanwhile, John Goodman points to a New York Times article that anti-smoking "scare tactics" actually encourage smoking (I believe the scientific term is "reverse psychology"). 

Thus, when State Senator Stewart Greenleaf announces he is going to crack down on "loopholes" in the smoking ban using rhetoric like "It is estimated that over 53,000 non-smokers die each year due to exposure" (which is a completely fabricated statistic, generated by people who profit from suing tobacco companies) it makes cigarettes sound delightful to millions of teenagers.

Cigarette Taxes Encourage Smuggling

A new report from the Mackinac Center (full 99 page report here) estimates the effect of cigarette taxes on smuggling of cigarettes (both "commercial" and "casual" - i.e. driving a few miles to buy cigarettes in a bordering state - types of smuggling) for all 50 states. 

Pennsylvania ranks in the middle of the pack - with about 13% of cigarette sales having been smuggled in in 2006, on net.  This ranks middle of the pack in the 50 state ranking, matching our middle of the road cigarette tax ($1.35/pack, the 18th highest rate in the country).

Interestingly, Pennsylvania has a net gain in casual smuggling, likely due to our borders with New York and New Jersey, which have among the highest cigarette taxes, and each losing over 40% of cigarette sales to smuggling.

How far will smoking bans go?

A new ReasonTV video, Just Can't Quit, looks at government's addiction to smoking bans.

California became the first state to ban smoking in bars a decade ago. Since then, smoking bans in bars, restaurants, bowling alleys, universities, you name it, have flourished.

But there was a time when Americans would have been outraged at the idea of politicians telling business owners how to run their own bars. Today, most gladly allow nanny state cops to snuff out smoking in bars, cars, beaches, stage plays—almost anywhere. Years ago comedian Dennis Leary quipped, “What’s the law now, you can only smoke in your apartment, under a blanket with all the lights out?”

It seems like plenty of politicians would love to ban that too, but they could never ban smoking in private homes...or could they?

Recently, the Bay Area city of Belmont passed a law that targets people who smoke in their own homes.

No Smoking Sign Mandate

Little noticed in the debate over Pennsylvania's new smoking ban was that it also included a smoking sign mandate. The Commonwealth Foundation got our notice (along with a "sign" we can display on the back), posted below.

The notice says we (as employers) must post a "No Smoking" sign; if we were one of the business exempted, we would need a "Smoking Permitted" sign for the front entrance. Failure to post signs could result in a $1,000 fine and having to wear a scarlet A in public.

Under threat of force, I will post the sign, right next to my "Smoking is healtier than Fascism" card and my "Citizen Legislators, Not Career Politicians" bumper sticker.

smoking ban - Upload a Document to Scribd

AFSCME opposes unlimited government?!?

Pennsylvania's State System of Higher Education (which runs 14 state universities, but not the "state-related" schools like Penn State and Pitt), banned all smoking on campus, both indoor and outdoor in all the air owned by the schools.

Not only are students protesting, but the union representing the employees - AFSCME Council 13 - is also objecting. AFSCME has not been known to support individual liberty, but they may now realize that "a government powerful enough to give you everything you want is powerful enough to take everything you have". If only they had joined us a few months ago.

Of course, it sounds like the union isn't concerned about the rights of university staffers being taken away as much as the power of the union bosses to negotiate (and benefit from) this expansion of government authority.

Thank You for (Not) Smoking

Pennsylvania's smoking ban goes into effect today and has created a cloud of controversy statewide, with a less than enthusiastic response from the smoking public. The Department of Health has already received about 700 requests for exemption. Health Secretary Dr. Calvin Johnson was amazed at the flood applications: "I have no idea as to how many we should expect. I quite honestly think 700 is too many and I hope we don't get anymore."

Some are not bothering to file an exemption. One local restaurant owner quipped, "I'm not going to adhere to it. After 29 years of smoking in my bar, I'm not going to deny myself and my customers an opportunity to light up a cigarette at the bar."

Businesses and patrons may be fined anywhere from $250 to $1,000 for failing to observe the new regulation. The law, which depends on tattletales for enforcement, applies to all public establishments, with some exemptions for restaurants, hotels, and bars.

The Emperor Has No Clothes: The Truth about Secondhand Smoke

Short paper from the Heartland Institute (click here for PDF) on the science of second hand smoke - including the oft-repeated claim about the number of deaths due to second has smoke, a figure not only refuted by subsequent studies, but discredited as a fabricated statistic. More on Second Hand Smoke and Smoking Bans:

The Nanny-State Mentality

Policy Point on Smoking Bans

Secondhand Smoke Facts

Economics of Smoking Bans

Still Pooping in my Salad

Smoke, Lies, and the Nanny State

How long will PA's smoking ban last?

Of course, Pennsylvania's criminalization of smoking in private establishments hasn't even gone into effect yet, but Jeremy Richards writes in the Heartland Institutes's Budget & Tax News that "History Shows Smoking Bans Likely to Be Repealed". Cutting to the punchline, he concludes:

Placed in historical context, today's anti-smoking restrictions appear to be neither progressive nor permanent. Like past bans, they are based on prejudices and conventional wisdom that are likely to be falsified by new scientific and health discoveries or, if you like, new prejudices and conventional wisdoms.

Also like past bans, today's prohibitions are leading to civil disobedience, black markets, and heavy social and economic costs.

With the anti-smoking message backed by billions of dollars from government, foundations, and drug companies, it is easy to overlook the backlash that is already occurring and has been growing stronger. Business owners have been fighting back against smoking restrictions, and prohibitions are being more widely flouted in places such as Italy, Spain, Turkey, and, yes, to some degree even in California.

In addition, governments need the revenue that smokers provide in taxes and in revenue to hospitality establishments that cater to a smoking clientele.

Though the anti-smoking movement looks formidable, if history is any indication we will not have to wait long for current smoking bans to unravel.

Smoking Ban shows need for part-time legislature

Nathan Shrader makes the case that the smoking ban - along with other nonsensical legislation - shows why Pennsylvania should move to a part-time, citizen legislature.

Smoking ban proponents are quick to buttress their position with bogus, inane theories about how people who work in bars and restaurants are dying from smoke inhalation. They ignore the fact that these hard working waiters, waitresses, and barkeeps can do what anyone else does if they don’t like their jobs: quit and get another one. It is called the free market and it is a beautiful thing.

Senate Bill 246 also creates loopholes allowing the state’s casino racket to be partially exempt from the ban and permitting smoking in cigar bars, tobacco shops, and bars that have 20 percent or less in annual sales of food. This number was concocted arbitrarily. Senator Stewart “Nanny State Stew” Greenleaf (R-Montgomery) and his cadre of cradle-to-grave coddlers were kind enough to “exempt” people who choose to smoke in their own cars or their own homes! I hope someone remembers to send him a thank you note and a pack of Swisher Sweets.

Smoking bans and individual rights

Given the title, and the link from GrassrootsPA, I expected Eric Heyl's column on the smoking ban to be a good read. Needless to say, I was disappointed. Heyl tries to use satire to mock the individual rights advocates opposed to the smoking ban. Here is the summary (with a bit of satire of my own).

Second-hand smoke will kill you instantly. Traffic lights are good, therefore government is justified to intervene in every aspect potentially making people healthier, including banning cheeseburgers. The only people opposing the smoking ban profit from cancer and death.

My satire-free response:

• The harm of "second-hand smoke" is greatly overstated, mostly by those whose money comes from suing tobacco companies for the harms of second hand smoke.
• The debate was never over banning smoking in truly public facilities such as hospitals, bus stations, and schools - even the most ardent opponents of smoking bans supports such restrictions (listen to Joe Bast on The BOX) - but private businesses, where customers voluntarily choose to visit.
• Smoking bans have real economic consequences for many private businesses.
• Over 80% of businesses are smoke-free, and many more are added to the list each day, without government mandates. That is, private preferences and the free market do the job Heyl thinks we need government to do.
• While Heyl argues that government can restrict individual freedom (which is perfectly consistent with libertarian philosophy, i.e. to protect the safety of others) he offers no idea of the proper role for government, and no limit on its ability to restrict our rights. He makes individual rights and economic freedom the punchline of a joke. He is a nanny-statist.

Will MacGyver rescue the smoking ban?

John Micek thinks the Senate Dems plan to pass a smoking ban that includes everything the conference committee bill did, plus exemptions so Scranton and Pittsburgh could pass their own bans, sounds a bit like a MacGyver plot.

For more on smoking bans, and why Angus should let this one die, here are some resources.

For more on MacGyver, click here.

Smoking Bans Ain't Cool, Unless You're a Fool

The conference committee on banning private businesses' right to allow smoking in their establishments has finally reported a bill. GrassrootsPA has the news roundup.

I have written on this before, and have little to add - other than that I seem to recall a Public Service Ad as a child with a jingle "Smoking ain't cool, unless you're a fool", which apparently stuck with me (and made me a lifelong non-smoker), though YouTube offers no evidence such a PSA ever existed. While smoking still "ain't cool", neither is government mandates on private businesses - of which 80% are already voluntarily smoke free.

More on Smoking Bans:

• The Nanny-State Mentality
  
• Policy Point on Smoking Bans
• Secondhand Smoke Facts
• Economics of Smoking Bans
• Still Pooping in my Salad
  

Smoke, Lies, and the Nanny State

Here is an interesting read on the science of smoking and smoking bans, with plenty of additional resources listed in the end, written by Joe Jackson (yes, that Joe Jackson) available through the Heartland Institute.

Smoke Freedom Day II

CBS 21 has a video of "Smoke Freedom Day" protest in Harrisburg. That's me in the video, absorbing second-hand smoke to make a political statement, like Sam Adams. ABC 27 also covered the event, but the video is not online yet.

My best quote was cut, but it basically went like this:

Q: "Don't you get annoyed being surrounded by smokers?"
A:"Yes, I hate the smell and can never get it out of my clothes - but I also get annoyed by people who laugh too loud and talk too much, but I don't think that should be illegal"

GrassrootsPA has a roundup of stories on the debate over the smoking ban bill. CBS 21 also had a story of bowling alleys voluntarily going smoke-free - without an edict from government.

More on Smoking Bans:

• Policy Point on Smoking Bans
• Secondhand Smoke Facts
• Economics of Smoking Bans

Smoke Freedom Day

WHP CBS 21 has a story on a quasi-protest of the looming smoking ban. Watch Ryan Shafik go all V for Vendetta on legislators, though his reasoned explanation for opposing the ban got cut.

Smoking Bans Redux

Brad Vasoli in the Evening Bulletin has an article on the proposed state smoking ban, featuring comments from yours truly (a non-smoker). Here is more information on smoking bans from the Commonwealth Foundation for the "The Debate is Over so Stop Debating Us" crowd:

• Policy Point on Smoking Bans
• Secondhand Smoke Facts
• Economics of Smoking Bans
  

Study: Smoking Bans increase drunk driving

A new study in an upcoming issue of the Journal of Public Economics finds that "smoking bans increase drunken-driving fatalities"; reported on the Marginal Revolution blog. This effect is due to people driving farther to find venues where they can smoke and drink.

Also on the smoking topic, Paul Gessing blogs on the mythical argument that smokers use more health care and pass those costs on to others (justifying higher taxes on smokers to pay for government health care programs). Gessing notes studies show that smoker and the obese use less health care, because they don't require as much end of life care (i.e. they die sooner). That doesn't mean government should enourage people to smoke and eat fatty foods to save on health care cost, but certainly undermines the "public cost" argument for regulating personal behavior.

Share the Wealth, Joe Camel

The PA Attorney General has joined a lawsuit against RJ Reynolds demanding $7 million ($100 million among the several states in the suit) because a cartoon version of Joe Camel appeared in Rolling Stone magazine.

Obviously, this is being done to protect people like me from picking up Rolling Stone to find out what crazy antics Britney Spears is up to, only to see the cartoon ad and immediately begin smoking - just like I signed up for a state health care career after watching this rapping woodchuck.

Tobacco companies must pay Pa. growers

Story from the AP and Intelligencer Journal on a court ruling that tobacco companies must pay tobacco farmers for lost revenue (HT to Grassroots PA). The PA Attorney General's office claims this will be a windfall for Lancaster County farmers. It won't -- let me briefly illustrate how foolish this court ruling is (particularly given that it is in response to the effects of a previous court ruling, effects which will repeat themselves.).

Cycle One:
Court orders tobacco companies to pay states ⇒ tobacco companies raise prices to pay cost of court order ⇒ demand for tobacco drops ⇒ tobacco farmers lose revenue

Cycle Two:
Court orders tobacco companies to pay tobacco farmers ⇒ tobacco companies raise prices to pay cost of court order ⇒ demand for tobacco drops ⇒ tobacco farmers lose revenue