October 1, 2007, here on slacktivist: Bad habits
Cigarette taxes can be effective as a tool of social policy or of health policy — as a disincentive to destructive behavior.
What doesn’t make sense is to try to use cigarette taxes as a tool of fiscal policy, as a reliable source of revenue. Trying to do so puts you up against all those studies the heart association and cancer societies cite. A cigarette tax hike can provide a short-term boost in revenue, but it also produces a longer-term decrease in the thing it draws revenue from, so over time it’s not a reliable or dependable source of revenue.
Once that revenue begins shrinking, the larger danger is that we could see something like what has happened with the lottery. States now have an interest, a stake, in lots of people playing the lottery. The casual players — those who can afford it as an amusing diversion paid for with disposable income — don’t buy enough tickets to fund everything the lottery is designed to fund. So states are now invested in the idea that hard-core players — people who play too much, who spend income on the lottery that they need for other things — keep playing, and that more people are lured into becoming hard-core players. And so states have gotten into the business of promoting waste and irresponsibility. Those “dollar and a dream” lottery ads have become so commonplace that we’ve become inured to how perverse this practice is, but it really is insane when you’ve got the government promoting vice over virtue.
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