Socking It to Smokers

Come Oct. 1 the current 16-cent-a-pack tax on cigarettes is scheduled to drop to 8 cents, a move that would deprive the Treasury of needed revenue even as it undercut a modest economic disincentive to smoking. Health and Human Services Secretary Margaret M. Heckler believes, as anyone with any sense must, that Congress made a mistake when it voted last year to let the cigarette tax fall. She is arguing for a retention of the 16-cent tax, but she wants about half the $4 billion a year that it raises earmarked for the Medicare hospital insurance trust fund.

Heckler makes an interesting argument for dedicating part of the tax to a specific use. The trust fund spends $6 billion a year on elderly and disabled people with lung cancer and other smoking-related illnesses. The fund also faces the prospect of going broke in the early 1990s, when its expenses are projected to exceed its income from payroll taxes. Heckler suggests that the cigarette levy be regarded as a user fee. Since smokers run greater health risks than non-smokers, they should contribute directly to costs of their later medical care. Our own view is that the 16-cent tax ought to be not just retained but also radically increased--as a revenue-raising measure certainly and, more to the point, an effort to make cigarettes so expensive that young people tempted to take up smoking might find them happily unaffordable. The best way to deal with the addiction of smoking is not to treat its health consequences after the fact but to discourage dependency in the first place.

We cannot, though, support the idea of ear-marking the cigarette tax. Get into the pattern of committing specific revenues to specific purposes and there’s no end to it. Smoking is indeed a costly health problem. But so, for example, are obesity and overindulgence in artery-clogging foods. Should there then be a “fat” tax to help pay for the diseases brought on by bad eating habits? With few exceptions, the best destination for taxes is the general fund. That fund deservedly ought to be added to with a cigarette tax much higher than it is now, and certainly much higher than it is due to become in October unless Congress has wiser second thoughts.