Monday, February 06, 2006

The pros & cons

My significant other thinks the Republicans have completely lame arguments against raising the tobacco tax. I’m not so sure, well actually I’m rather indifferent to the whole thing, but just for fun let’s cut & paste the arguments.

Using the Register's tobacco tax pro & con op-eds, I’ll attempt to deconstruct the rhetorical legos slapped together by two esteemed Iowa types; Joe Murphy, a senior student government guy from UNI writing for a tobacco tax increase and Jamie Van Fossen, a fiscal ninja and House Ways & Means chair writing against raising the tobacco tax.

Pro: Purchasing cigarettes is price-elastic, so increasing the price of cigarettes is the best deterrent against smoking. As the price increases, the demand and consumption of cigarettes will decrease. It's estimated that if the tobacco tax is increased by $1, youth smoking would be reduced by 19.3 percent.

Con: Put the health questions aside. One reason I object to proposed increases is my belief they will never raise the kind of revenue many project. In state after state, cigarette and tobacco tax increases have failed to do that. The consequence of a miscalculation could be staggering.

What I’m thinkin’:

Joe Murphy has bought the Chaloupka line on elasticity, which is really an opportunity cost; you supplant one activity for another based on the subjective measure of costs. But has Joe really thought this through, I mean, the reason most college women start to smoke is to keep the weight off, and without ephedrine on the market and with all that greasy college food, well. But what college boy really needs to sit next to girls with BMI’s under 25?

Rep Van Fossen just doesn’t like taxes. If he could have gotten away with writing a string of sentences that start and end with some version of ‘I just don’t like taxes’ I think that’s what we’d be reading. However, the process requires him to blah, blah his way through this op-ed. On his declining revenue point – so, until you vaguely recall that the crazed Steelers fan is still sitting in Terrace Hill just waiting to sign any spending bill that has national democrat constituency penciled in the corner.

They go on, read ‘em if you want, but the essential arguments are what you’d expect; we must raise the tobacco tax to save lives or what the @#$% are we thinking relying on an unstable revenue stream to fund new programs.

I think the Iowa legislature will raise the tobacco taxes...when there is a Republican living in Terrace Hill willing to use a tobacco tax increase to buy down other taxes legitimately.

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