Tobacco tax hike: It’s all about the money
20 May 2016 | New Zealand Taxpayers’ Union / New Zealand
The New Zealand Taxpayers’ Union have written a report entitled the Passive Income: How the Government Uses Smokers as Cash Cows.The report details the effect of tobacco excise increases, the failure of the Government to legalise the sale of healthier alternatives which would minimise harm, and the misuse of taxpayers’ money given to not-for-profits which lobby the government.
Politicians claim higher tobacco taxes are necessary to promote better health, but the Government has prevented the sale of new generation smoking alternatives such as e-cigarettes which are 95% less harmful and are the most popular smoking cessation tool used in England.
While politicians cry crocodile tears about the harms of smoking, they are refusing to allow the sale of healthier alternatives. It appears the only reason is to protect the revenue stream from the taxes on traditional cigarettes.
From today, a $20 20-pack of cigarettes includes nearly $16 dollars of tax
It makes a complete mockery of the National Party’s election promise not to increase taxes.
Increases in tobacco excise tax are often held up as interventions that are effective at reducing consumption amongst low socio-economic groups. However, significant tax increases have coincided with an increase in the socio-economic smoking gradient. Counterintuitively, the poor are the least likely to respond to tax hikes. That means they, and their families, go without.
Just because a consumer base is poor, it does not mean that the Government is any more justified in making consumer health choices for them. Worse, increasing taxes well in excess of the health costs of tobacco, knowing that they are being paid by those least able to afford it, is morally questionable.