Not content to impose a heavy tax burden on cigarette smokers and to outlaw sales to anyone under 21, on June 20th, the San Francisco Board of Supervisors finalized the ban on all sales of flavored tobacco, flavored vaping liquids and menthol cigarettes in the city.
Prohibition never makes for good public policy, even if well-meant, because buyers and sellers are not chess pieces that politicians can move around the board at will. Banning the sale (but not possession) of flavored cigarettes, moist smokeless tobacco and e-cigarettes containing menthol or other flavors would facilitate smuggling and hurt local businesses, producing only minor reductions in tobacco use. At $2.87 per pack, California already has the nation’s ninth-highest tax on cigarettes.
Today, you would have to be a Martian not to have been warned about tobacco’s dangers. The Centers for Disease Control released a study early this month documenting that tobacco use by young people fell to a new low last year.
But taxing or banning sales of flavored tobacco products does not mean that consumption will decline significantly. It’s hard to believe that young people and poor people would not begin to smoke or chew, or that current users would stop immediately, if flavored tobacco were unavailable. Lots of people started smoking before tobacco came in flavors, and many have since stopped.
Some may simply buy their favorite flavors outside the city. That’s what happened with soft drinks, in response to new taxes in Philadelphia and Berkeley. It took retailers outside of Philadelphia only a short time to begin advertising that cheaper, untaxed soda was available just across the border. After Berkeley adopted a 1-cent-per-ounce tax, soda sales declined by 10 percent in the city but rose 7 percent in nearby towns. Philadelphia’s soda retailers later announced layoffs. The comments of many local businesses in San Francisco indicate that the flavored tobacco ban would have similar adverse effects on their shops.
Cigarette taxes in New York, which are colossally high, are meant to reduce the demand for cigarettes and encourage healthier choices. But the Tax Foundation reports that in 2014 more than half the cigarettes consumed there were smuggled to avoid the tax. Prohibiting sales of flavored tobacco almost surely will trigger a similar response.
Bans and excessive taxes create black markets. Californians should know these simple facts, given their experience with marijuana. It’s absolutely absurd that less than a year after California legalized recreational marijuana, San Francisco is considering banning certain tobacco products.
Supporters of the ban on flavored tobacco often emphasize that minorities and uneducated people are more likely than the average person to smoke. That is true, but why treat them like irresponsible children to make the political elites feel good?
We don’t deny that smoking cigarettes can wreak havoc on health. Consuming any tobacco product is potentially harmful. But economic research shows that wealthier people naturally choose healthier lifestyles. Removing government-created obstacles to success is a better way to encourage people not to smoke than attempting to ban selected tobacco products.
The right to choose is the very essence of freedom. Denying that right to low-income and young people makes them second-class citizens. Prohibition not only violates economic principles but is inconsistent with liberty. Bans historically have failed to improve the lives of those they are meant to protect. One can hope that the flavored tobacco ban will be different, but history and economic theory make that outcome unlikely.
|William F. Shughart II is Research Director and Senior Fellow at the Independent Institute, J. Fish Smith Professor in Public Choice in the Jon M. Huntsman School of Business at Utah State University, and editor of the Independent Institute book, Taxing Choice: The Predatory Politics of Fiscal Discrimination.|
|Josh T. Smith is a master's student at Utah State University majoring in economics and political science. He works as a Policy Analyst at Strata, a policy research center in Logan, Utah.|
So-called sin taxesthe taxing of certain products, like alcohol and tobacco, that are deemed to be politically incorrecthave long been a favorite way for politicians to fund programs benefiting special interest groups. But this concept has been applied to such sinful products as soft drinks, margarine, telephone calls, airline tickets, and even fishing gear. What is the true record of this selective, often punitive, approach to taxation?