Proposition 56: A Bad Deal for Californians
California has a nasty history of setting up bloated budgets which rely on fickle tax revenues and permanent temporary taxes. Proposition 56 is a regressive tax targeting California’s poorest residents. It manages to exact more in taxes from smokers and continue the practice of ensuring our budget’s irresponsible reliance on a small group of taxpayers – without effectively helping smokers quit smoking.
Here’s the situation: when states set up budget expenses – things like payments towards road maintenance, funding the California Highway Patrol, and paying off debt – they must also find revenue streams to pay for them. In their infinite wisdom, however, California legislators devised schemes to skew income taxes and ‘sin’ taxes (tobacco and alcohol) to create lucrative revenues. Thus big-government liberals may brag about balancing the budget whilst lining their pockets.
The issue comes when we consider the reliability of these revenue streams. No one, liberal or conservative, would argue that unreliable tax sources are the ideal way to pay for services – yet that’s what we have. In the case of the income tax, that means skewing it towards the rich, who often rely on income from capital gains (selling on the stock and bond markets). Thus when the stock market does poorly, and the rich lose money, California’s income tax takes a nosedive.
This is the primary issue with raising tobacco taxes. If you believe the scant evidence that higher tobacco taxes decrease smoking, then setting up California’s budget to rely on a steadily decreasing supply of smokers is a terrible idea. After all, what happens when smokers quit purchasing cigarettes? Tax revenues plunge, and state services wilt.
If, on the other hand, you believe the studies which argue against using tobacco taxes as a health measure you must reckon with the sinister idea at play in Prop. 56 – taxing into oblivion a captive audience of tobacco addicts. Considering that taxes already account for 27.3% of the wholesale cost per 20-cigarette pack, that’s a pretty cynical calculation indeed. (If you doubt my reasoning here, consider the insanity of extending tobacco taxes to tobacco-less e-cigarettes. Is that for vapers’ health, too?)
Recent studies have drawn correlations between smoking and lower incomes. No, workers are not paid less by employers because they smoke; rather, those at the bottom levels of the education and income ladder comprise the largest cohort of regular smokers. Poorer Americans tend to spend more – and a larger percentage of their income – on tobacco products. This is critical, since it means tobacco taxes necessarily fall on those with the least ability to pay them – thus, they are regressive taxes. As Cal Tax notes, “smoking is more prevalent among populations in the income range of $10,000 to $20,000. If this initiative were to go into effect, California’s tobacco taxes would be the sixth highest in the country – mostly paid by California’s poor.”
Proposition 56 entails a $2.00 per pack increase. That’s a 229.9% increase on the current tax, cynically levied on a group of people supposedly for their own good, despite the studies which show otherwise. This is why we must oppose Prop. 56. California calls itself a progressive state; can you imagine Democrats advocating for a regressive 230% increase in the price of food, or clothing, or electricity, or Social Security taxes just to line their own pockets?
Actually, yes – yes, we can.
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