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I have an opinion, as someone who doesn't smoke and who has had parent who did and quit smoking.

Tobacco taxes should be erradicated or strictly reduced. I work at a C-Store/Gasbar where we sell a lot of tobacco products on a daily basis. I'd estimate we sell $1,500 on a daily basis. A huge proportion of my community smokes. Upwards to half the community.

The reason I think it shouldn't be taxed is the vast majority of smokers are low-middle class individuals who already struggle with money. My supervisor is a lady who is in her 60's, and has to work the night shift at a gas station 5 days a week, and she and her husband both smoke, and I'd say well over half of the money she makes working at the gas station goes to smoke purchases.

The prices are ridiculously high, for example:

Pack of any type of Canadian Classics: $10.60
Pack of any type of ExportA: $12.91
Pack of any type of Players: $12.54
Pack of any type of DuMauriers': $12.45

The cheapest smokes you can get are Nexts which cost, still, $8.39

In the states the most expensive smokes are in the state of New York, and the highest prices there is $5.19

This is an unfair target to low income/middle class people. Yes there should be educational programs trying to get people to quit, and I'm fine with hiding the tobacco products in those concealed drawers/cuboards, but I really feel strongly it should be reduced. Let people have their vices.

I think it should be halved

   

Excise taxes target products with inelastic demand, like tobacco, alcohol and gasoline. Unless something changes the nature of these products, thereby increasing their elasticities of demand, you can forget about tax reductions. Inelastic demand is the taxman's wettest dream.

There is also a strong inverse correlation between price and tobacco consumption among teenagers. In other words, for teenagers, tobacco is a much more elastic good. High prices reduce teen smoking, so the tax, itself, is a deterent to teen smoking.

   

If they have a hard time making ends meet, there is always the option to quit. It's all about priorities.

(I myself have smoked 14 years)

   

Yet you are still smoking

   

   

I have to laugh when I hear smokers complain about the taxes. I just wish the taxes gained would be funneled directly into health care and not in to the government ether. That is where smokers health issues put a drain on the health care coffers.

I have to scoff even more about "smokers rights" nobody was ever born addicted to cigarettes. Sometime somewhere there was a decision made to start smoking. If you are having issues around smoking be they, health, financial or social, quit by any means necessary. Then talk to me about non-smoker's rights. We as NON-SMOKERS are the only ones who have the right to make an issue about smoking. There is no right to fight for your foul second hand pollutants.

   

Now, if you apply the exact same argument towards alcohol, I could even see myself agreeing with you on both counts!

   

It's a slippery slope then. Fat people, people with genetic predispositions, etc, etc, should all have to pay higher rates to cover their higher expected health care costs? The flop side of the coin that no one considers is that smokers and drinkers and obese people live shorter lives, so they collect LESS of some government services, like CPP for example. Should they get to make lower CPP contributions?

   

While it may be true they lead shorter lives the cost to health care far exceeds the savings from CPP. You are right that its a slippery slope though.

Oh, what does inelastic mean in your context?

   

If everyone quit smoking, health care costs would go up.

Actually, it's kind of funny, because years ago, probably 50-60% of the population used to smoke. That's when we started to see all the stats about how much smokers were costing us. Now--I'm not too sure about the rest of the country, but here in BC--less than 15% of the population smokes.

I know what you're thinking--health care costs must have plummeted with a good 35 to 45% of the entire population quitting smoking,right?

Well, interestingly enough, it turns out that they are skyrocketing. The healthier we get, the more health care costs, because we are forever faced with more intractable, more expensive, health issues as we reduce or eradicate the "low hanging fruit" (like smoking).

Blindingly obvious when you look at it.

   

Actually, 2 weeks ago, a report of Health Canada made 14 years ago was made public saying that high taxes had virtually no effect on teen smoking.

   

I recall when Chretien got into office one of the first things he did was reduce the tax on cigarettes because they were just been sold illegally and avoiding the tax. So then in Ontario McGuinty raised the tax and they are now being sold by Indians for $25 a carton avoiding the tax again. Rather a lot of people smoke the native brands now.

   

I think the Conservative Opposition here in Ontario should make a lower tax on alcohol and cigarettes part of their for-the-little-people platform. This would not cost that much but would cause a stir and some appreciation from the working class vote.

   

No effect on quantity smoked? No way. It maybe doesn't get them to quit, but it gets them to cut down for sure.

   

For all products, as price increases, quantity demanded decreases. For inelastic goods, however, even though quantity falls, total revenue increases.

For example, let's say, in a particular market, the price is $5 and the quantity sold is 10. Therefore total revenue is $50. If the price of this product then increases to, say, $6, we know we'll sell less. If quantity falls to 9, then total revenue is now $54, which means it's inelastic. If the quantity had fallen to 6, then total revenue would be $36, so that would indicate an elastic good.

Inelastic goods have relatively steep demand curves, which means price can be increased greatly with relatively small reductions in quantity demanded. So, goods that are addictive or goods for which there are few substitutes tend to be highly inelastic, like gasoline, alcohol, tobacco, heroin, etc. These products are targets for excise taxation.

Simplified, elasticity is the responsiveness of quantity demanded to price changes.

   

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