Pubdate: Sun, 26 Jul 2009 Source: Sun-Sentinel (Fort Lauderdale, FL) Copyright: 2009 Sun-Sentinel Company Contact: http://drugsense.org/url/mVLAxQfA Website: http://www.sun-sentinel.com/ Details: http://www.mapinc.org/media/159 Author: Kingsley Guy FLORIDA'S TOBACCO TAX: BE VERY CAREFUL WHAT YOU WISH FOR Whenever you hear politicians touting the wisdom of their pet ideas, remind them of the Law of Unintended Consequences. The positives they ascribe to certain courses of action could be accompanied by negatives that offset the benefits. Earlier this year, the Florida Legislature voted to increase the state cigarette tax by $1 a pack to help balance the budget. The anti-smoking scolds declared that along with raising money, the tax would cut down on tobacco use, improving the overall health of the population and saving on medical bills. The health benefits are undeniable, though the financial benefits are harder to quantify. There's no denying people who don't smoke tend to live longer than those who do, but death is inescapable. The end-of-life medical expenses for non-smokers may come a decade or more later than for smokers, but eventually they will arrive, along with other expenses that can accompany a long life. Obviously, people would be better off if they didn't smoke, but that doesn't mean excessive taxation of tobacco is the way to engineer a tobacco-free society. It's hard to imagine a more regressive tax. Wealthy, educated people smoke far less than poorer, less educated people, so the financially underprivileged pay a disproportionate share of tobacco taxes. "All these people need to do to avoid the taxes is to stop smoking," the scolds argue. But nicotine addiction is one of the hardest addictions to break. That's why tobacco companies still turn profits. A decade ago, Florida and other states entered into agreements with rich, contingency-fee lawyers to sue cigarette manufacturers. State attorneys general claimed their aim was to punish the evil tobacco companies. Naturally, the tobacco firms passed the cost of the legal settlements onto consumers. The cigarette producers continued to make profits. At the same time, a few lawyers worth tens of millions of dollars increased their fortunes to hundreds of millions. The financial windfall for the trial lawyers wrung out of poor smokers was unconscionable, but it wasn't criminal. The current inclination of governments to raise tobacco taxes, however, is resulting in huge financial gains for those who do break the law. High taxes now make cigarette smuggling, counterfeiting and bootlegging even more profitable. Buy cigarettes in a low-tax state and sell them illegally in a high-tax location at a price less than in a store. Better yet, hijack a truck loaded with cigarettes and unload them in New York City, where a pack of legal smokes can cost upward of $10. Smuggling across state lines used to be largely the purview of small-time operators. But according to a recent Wall Street Journal report, with financial incentives rising, organized crime is getting more and more involved. States now are losing up to $5 billion a year in taxes because of illegal cigarette sales. To recoup some of the money, Florida and other states, along with the federal government, are redoubling their efforts to crack down on the illicit trade. Good luck. With profits from illegal sales so high, more and more people have decided the rewards are worth the risks. Consequently, high taxes are resulting in a tobacco war that is smaller, but not dissimilar to the un-winnable drug war the United States is fighting. The result will be more arrests and more incarcerations, putting an even greater strain on the criminal justice system. The lives of law-enforcement officers will be put at risk as they confront the cigarette smugglers. One thing's for certain: The tobacco scolds will ignore the problems and continue to claim that high cigarette taxes are a great thing. This will prove once again that the biggest threats to society come from those filled with righteous indignation.