President Bill Clinton has decided that the smoking population should shoulder the costs of his healthcare reforms. President Clinton is seeking to raise taxes on cigarettes by $2. As a smoker myself, I do not see the logic behind his thinking. I understand that smoking costs the nation "some $65 billion a year in healthcare outlays and lost productivity," but it still is not right (Koretz 18). Whereas Clinton's plan has a few good points to it, this plan also has some problems. Clinton needs to sit back and think this tax over a little bit more before deciding to propose it.
One problem is the fact that smokers will be bearing the majority of the healthcare reforms. Don't other people get sick? It is obvious that if everyone will benefit from this healthcare, then the whole country should contribute the same amount of money to it. This tax could raise $30 to $35 billion a year in revenues. According to Matthew Myers, counsel to the Coalition on Smoking or Health, this money would be enough to provide "minimum health insurance to the 36 million Americans who currently lack coverage" (qtd. in Koretz 18).
One of the best elements of this plan is the fact that it will cut consumption drastically. The group of people who will be hit the hardest by this tax will be the lower-middle class and the poorer people. Being unable to pay the tax for very long, the only option they will have is to quit. Not only will this plan cut consumption, but it will also encourage people never to pick up the habit. And this tax will also cut down on usage in the teen years, when most people start smoking. The cost-conscious teen will not only stop smoking, but many will never start.
But, as I have said, this plan also has a few minuses. With the majority of smokers quitting and no one acquiring the habit, this tax will soon fail. If no one is smoking, then how will Clinton pay for the healthcare reforms? Will all of the people unable to pay for healthcare be left without it? The answer is simple. Tax something else.
Another minus about this proposal is the fact that the tobacco industry is a major contributor to North Carolina's economy. The less people smoke, the less money the tobacco companies can contribute to charities. R. J. Reynolds supports the Arts Council of Winston- Salem and schools in Yadkin and Forsyth Counties. Philip Morris contributes to the State of North Carolina. The Ligget Group, Inc., gives money to the United Way of Durham. Don Haver, vice president of contributions for R. J. Reynolds notes, "What we give is tied to what we make" (qtd. in Schwartzkopff A4). If the company's profits drop, so do the company's contributions. The United Way receives about 20 percent of its budget from tobacco companies, and if they lose that money "We would bleed" (qtd. in Schwartzkopff A4).
Other people who would be hurt by this tax are the tobacco farmers themselves. North Carolina's, Kentucky's, and Tennessee's main crop is tobacco. And these men and women make up one of the largest lobbies in Washington, "When the going gets tough in Congress, the cigarette industry usually calls in its toughest lobbyists: tobacco farmers" (Weisskopf A4). Not only does the tobacco lobby help Congress with bills, they also helped Congress members get elected. According to the National Library in Money and Politics, "$2.3 million was given to congressional candidates during last year's campaigns" (Weisskopf A4). The farmers helped these men and women get elected and now Congress wants to stab them in the back.
An example of the problems that can arise is seen in the problems Canada experienced. When Canada decided to raise its cigarette taxes, consumption did drop with both adults and teen- agers. But, the cigarettes moved quickly to the black market. Charles Screven, president of Columbia Union College, writes that cigarettes "pave the way to marijuana and cocaine addiction" (21). And it definitely will if they are being sold right along side of these drugs.
As you can see, Bill Clinton's tax plan has both positive and negative aspects to it. It will discourage people from smoking and it will give healthcare to those who desperately need it. But, as people quit smoking, charities lose money and farmers lose work. As always, when one person wins, another loses. Lives will be saved by this tax, but livelihoods will be lost. And nobody wants to have to pay more taxes. Bill Clinton needs to think long and hard about this plan. It is a good idea, but it has too many set-backs for it to really work.
Works Cited
Koretz, Gene. "Economic Trends." Business Week 15 March 1993:18.
Scriven, Charles. "A Tax We can Live With." Christianity Today 8 March 1993: 21.
Schwartzkopff, Frances. "Largess Complicates Tax Debate in N.C." Atlanta Constitution 13 May 1993: A4.
Weisskopf, Michael. "Farmers May Desert the Battle." Atlanta Constitution 13 May 1993: A4.