A couple of decades ago, cigarette prices were raised dramatically in California. The explanation went that smoking resulted in increased costs to the State due to smoking-related health problems in uninsured people who would then end up having the State pay their medical bills.
IIRC, the several-dollar, all-at-once increase in price was supposed to go into a special fund to offset these costs.
Now that every person, by law, must have health insurance – where will that money go? I know damn well they are never going to roll back cigarette prices. Will the tobacco companies now get to just keep all that extra money?
The state still has to pay for health care. So the answer is nothing changes. The state covers health insurance for the poor residents and subsidies people of lower income. They take the income from tobacco taxes and use it to pay for health care.
It was a tax increase rather than a price increase, so the money goes to the state, not tobacco companies. The only decades-old cigarette tax increase I can find is Proposition 99 from 1988, which levied a tax of 25 cents on each pack. The revenue from this dramatic 25 cent per pack tax is is earmarked for:
1, 2, and 4 are still perfectly valid even if you assume that there are no longer people without health insurance, and that health insurance is always covering 100% of every patient’s bill.
Made me laugh this did. I am not a smoker, but if I smoked 20 a day, the government would get around £2175 of my hard-earned as tax every year. (Just under £6.00 a packet)
This would require me to earn over £2800 before tax.
Trying to keep it as GQ as possible, I think it is universally agreed that these promises of tobacco tax money paying for health care for the poor, and gambling winnings going to pay for schools are simply political shell games. The state already pays for education and the poor, and if they need more money for these or any other programs, they could just as easily raise the income tax, the sales tax, or the gasoline tax.
The sales pitch of tying these particular funds to this particular program is an accounting trick that the government really doesn’t take seriously.
Giving all cancer patients a .45 round to the head would decrease health care spending too, but I don’t think any of us think that would be a good way to cut costs.