Cheap Cigarettes

A coalition of health organizations wants to quadruple the tax on a pack of cigarettes in California to boost funding for a variety of health programs.
The per-pack tax would jump by $2.60 under an initiative the coalition hopes to place on the November 2006 ballot, supporters said Tuesday. If voters approve the proposal, California's total tax on a pack of cigarettes would rise to $3.47, the highest in the nation.
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Revenue from the higher tax would be directed to various health programs, including cancer screening, prevention and research, low-cost children's insurance, and tobacco education and cessation.
Because the extra per-pack tax would be expected to curb sales, the proposal allots $159 million a year to offset any loss of revenue to programs supported by an initiative approved by voters last year. That measure added a tax of 50 cents a pack to fund early childhood education.
The initiative also would give money to local law enforcement to enforce tobacco control laws, which critics said would be needed to offset an expected rise in black-market cigarettes.
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The tax is projected to raise $2.7 billion annually if cigarette sales remain at the current level, but the higher price is expected to cut sales by about 8 percent a year, supporters said.
There is so much going on in this story, it’s hard to know where to start.  First, there is a tax on cigarettes to fund early childhood education?  How do you even begin to justify that?
Secondly, aren’t programs that seek to eliminate tobacco use counter productive?  How will low-cost children’s insurance and cancer screening programs survive if people stop paying the cigarette tax that fund these programs?
I’m not exactly sure how much cigarettes cost in California today, but I’d bet that an increase of almost $2 per pack is significant enough that their estimated decrease of 8% is more than a little low – according to one source, when New York hiked taxes by $1.5 sales dropped by as much as 64% in NYC.
Now, to be honest, I don’t really care how much CA decides to charge for a pack of cigarettes, but money grubbing politicians really get to me, regardless of the form that it takes.  Liberals that can grasp simple economics rather ticks me off as well and I sincerely hope that this change in taxes creates a net loss of tax revenue.  
I just worry about those kids that will have to do without early childhood education – how will they ever learn that smoking is bad for them?