The backrooms of American politics are not so smoke-filled now, but hypocrisy hangs as thick as ever over Washington. President Obama, who has been a three-pack-a-day man for most of his life, declares smokers Public Enemy No. 1 in his latest budget. He wants a near-doubling of the federal tax on cigarettes, to $1.95 a pack, all to pay for a universal preschool program for 4-year-olds. It's the Democratic schizophrenia on tobacco.
If liberals believed their own rhetoric, they would call for an outright ban on tobacco, not a Mike Bloombergian half-measure, such as ordering retailers to keep the packs out of sight. The would-be successor to New York City's nanny-in-chief, City Council Speaker Christine Quinn, called for raising the minimum age for buying tobacco from 18 to 21, as if this would prevent youngsters from lighting up.
In Maryland, a Democratic state senator from Baltimore County unsuccessfully sought earlier this year to fine drivers $50 if caught smoking with a passenger under the age of 8. If someone of tender age shouldn't be subjected to secondhand smoke, why exclude 10- and 12-year-olds from protection? Indeed, why not ban smoking entirely?
There's a simple answer: Liberals and Democrats can't call for a neo-Prohibition ban on cigarettes because they're addicted to tobacco revenues. Taxes on tobacco finance too much of their social spending to allow such a drastic move. The precursor to Obamacare, Hillary Rodham Clinton's State Children's Health Insurance Program, enacted in 1997, was financed with a tripling of the tax on tobacco. Her opponents pointed out how this wouldn't work, because the sales of tobacco would fall, and so would the tax revenues that the program was intended to depend on.
Economists know this as the price elasticity of demand, which shows the responsiveness, or "elasticity," of the quantity of a good or service to a change in its price. It's simple. As the price of a product goes up, the quantity of it sold goes down. The higher taxes raise the price of tobacco, sales decline, and so do the tax revenues.
In other words, you can't keep going to that same well because it will eventually run dry. Liberals argue that if higher taxes cause smokers to quit, so much the better. This is true, of course, but the resulting lower tobacco-tax receipts mean that since a federal program once begun never goes away, it becomes necessary to raise other taxes or to run up deficits to keep it going. Economics 101 supplies reason enough to say no to funding universal preschool from the pockets of smokers.
The Washington Times
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.