Expanding health insurance coverage for children: excellent idea.
The issue isn’t that the tax is “regressive” in some generic sense; regressivity could be compensated for by changing other tax rates or benefit levels. The problem is the specific impoverishment of elderly cigarette addicts. For a two-pack-a-day smoker living on SSI, a 60-cent-per-pack tax increase would eat up about about 7% of the monthly benefit check. And the health benefits of quitting in old age may very well not be great enough to counterbalance the unpleasantness of quitting and the loss of what may be an important pleasure and comfort in an otherwise grim life. (The costs of not starting smoking in youth are much smaller, and the benefits much greater.)
It wouldn’t be hard to arrange access to lower-taxed tobacco products for poor, elderly smokers. But they probably can’t pay Fred Thompson’s lobbying fee, and everyone else in the game is happy to take their money, just as the state legislatures and the tort lawyers were delighted to make smokers pay for the sins of the tobacco companies in the “global settlement” of the tobacco litigation.
Jon Caulkins and I say:Feh.
JSTOR version of the published paper here.