THE ISSUE: California's tax on cigarettes, last raised in 1998, is 87 cents per pack, ranking 33rd among the states. The average tax in all 50 states is $1.46. Voters on June 5 will decide whether to raise California's tax to $1.87, ranking 16th among the states. The additional money would go to cancer research, smoking cessation, prevention of tobacco-related diseases and law enforcement.
Pia Lopez: Yes
So-called "sin taxes," on items such as alcohol and tobacco that place burdens on the larger society, have a long history. Their purpose is to moderate or discourage the use of the product and, today, to recoup some of the costs to society for law enforcement and health care related to their consumption.
Since these products are not necessities and can ruin health, Adam Smith, the father of free-market capitalism and modern economics, favored taxing them. He wrote in "The Wealth of Nations" (1776): "Sugar, rum and tobacco are commodities which are nowhere necessaries of life, which are become objects of universal consumption, and which are therefore extremely proper subjects of taxation." That logic remains true today.
Such taxes can be set at a rate to stabilize consumption like California's currently low rate of 87 cents per pack. Or they can be set at a rate to reduce consumption the aim of Proposition 29.
We know from research from the Journal of Health Economics to the Centers for Disease Control and Prevention that raising the price on a pack of cigarettes is the best way to prevent kids from starting the smoking habit. The general consensus is that every 10-cent increase in price generally reduces smoking by 3 to 5 percent and smoking by kids by 6 to 7 percent.
If a higher cigarette tax works as expected, it is a declining source of revenue. Thus, it should not be relied on for general fund purposes such as education, prisons and parks, which need stable funding. The money should go to reduce the health impact of smoking and to law enforcement to prevent black market sales. This is a case where earmarking for a specific purpose is appropriate.
That is what Proposition 29 would do.
The $1 increase would be distributed to five funds: Sixty percent for research into cancer and tobacco-related diseases. Fifteen percent to grants and loans for research facilities. Twenty percent to tobacco prevention and cessation programs. Three percent for law enforcement to reduce cigarette smuggling, tobacco tax evasion and illegal sales to minors.
Only 2 percent would go to administration, mostly reimbursing the state's Board of Equalization for tax collection costs. This does not create any giant new bureaucracy.
Big Tobacco, led by Philip Morris and R.J. Reynolds, so far has spent $40 million to defeat Proposition 29. Past experience tells us they will spend whatever they think it takes. Don't let Big Tobacco win again.
Increasing California's tobacco tax is long overdue. That's why I'm voting "yes" on Proposition 29 on June 5.
Pia Lopez is an editorial writer at The Bee.
Ben Boychuk: No
In the end, the case for Proposition 29 is an emotional appeal. It's effective, too.
Yes, yes, higher cigarette taxes drive down smoking. Yes, yes, the revenue from those remaining smokers will pay for important research.
One of the stranger arguments in favor of Proposition 29 is how California's tobacco tax is too low. We currently rank 33rd in the nation; if passed, Proposition 29 would place us 16th overall. This is supposed to be "progress."
But ultimately, the campaign to hike taxes tobacco or otherwise is about demonization.
Pia says, "Don't let Big Tobacco win again." The Yes on 29 campaign says, "Stop Big Tobacco's lies." Peter Schrag, writing at California Progress Report, says, "There are lots of good reasons to support Proposition 29 not least those named Philip Morris and R.J. Reynolds."
For good measure, Schrag throws in the Republican Party's support for Proposition 29's opponents, whom he dubs "Friends of Lung Cancer."
Got that? If you oppose higher taxes on cigarettes, you are a "Friend of Lung Cancer." You want people to die agonizing deaths. If you oppose higher income and sales taxes, you are an "extremist," according to Gov. Jerry Brown. You also hate children, the poor, minorities, clean air, parks and I'm guessing puppies and daffodils, too.
It's easy to demonize Big Tobacco. After all, the cigarette companies lied for decades about smoking and its dangers. So they deserve everything they get, right?
We saw a species of this argument in 2010, during the campaign against Proposition 23. If passed, Proposition 23 would have suspended AB 32, California's "Global Warming Solutions Act," until unemployment fell below 5.5 percent or lower for four consecutive quarters. AB 32 will make energy and therefore just about everything else more expensive in California.
But Proposition 23 lost big, in no small part because its opponents successfully smeared its backers as tools of "Big Oil."
But there are very good reasons for opposing Proposition 29, and friendship with cancer isn't among them.
Here's the big one: Proposition 29 is more ballot-box budgeting, which has exacerbated California's fiscal woes. Good intentions do not always make good policies.
Even Schrag understands this. "Earmarking yet another revenue source to a specific objective, no matter how worthy, merely reinforces California's long-standing autopilot spending pattern," he wrote. "If we're ever going to break the state's dysfunctional governing system that's a habit we badly need to break." In the end, Schrag opposes Proposition 29.
Turns out, those dastardly "Friends of Cancer" really do have the better argument on the merits. Don't let the politics of demonization win again!
Ben Boychuk is associate editor of the Manhattan Institute's City Journal, (www.city-journal.org/california).