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Sin tax reduces smoking, but creates deep deficit for key public health program

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Created: 12 February, 2010
Updated: 13 October, 2022
3 min read

Extra taxes on such goods as alcohol and tobacco are sometimes referred to as “sin taxes,” since, as the name suggests, they are seen as vices.  When buying a loaf of bread at the market, you may have noticed that you will not be charged an additional tax, whereas if you go to buy a bottle of wine or a pack of cigarettes, you will incur that charge. Such extra taxes were set up (particularly on cigarettes) as a form of social punishment for those who still choose to exercise their God-given rights as Americans and smoke a cancer stick or twelve each day. On some level, it was hoped or believed that by charging extra on such “unhealthy” goods, their consistent users would eventually throw in the towel and kick their nasty habit. Eventually, governing bodies (such as the state government in California) began to rely on such taxes to fund measures seen as “good” in the eyes of the public.


Fast forward to 2010: smoking is actually becoming passé, or at least too expensive for most seasoned smokers. According to the California Department of Public Health, the California Health Protection Act of 1988 (also fondly known as Prop. 99) mandated that the price of a pack of cigarettes would increase by $0.25, and the funds collected would go toward more “charitable endeavors." The newfound revenue was slated to go toward “programs to reduce smoking, to provide health care services to indigents, to support tobacco-related research, and to fund resource programs for the environment.” The law further stipulated that the Health Education Account would receive 20% of the funds, the Physician Services would receive 10%, both the Research Account and the Public Resources Account would receive 5% each of the revenue, and the remaining 25% of the revenue stream would go to the Unallocated Account. More recently, one specific program which has been directly funded by the cigarette tax is Every Woman Counts, a program tailored to serve women’s health needs for women in lower socioeconomic conditions. One of the most well known services EWC offers is cancer screenings for those who otherwise cannot afford them.


While this was fine and dandy, and served to force those chain-smoking “sinners” to pay for “good” programs for the rest of us, something happened: the smokers stopped smoking (or at least purchasing cigarettes). And now that it looks like EWC will fact significant funding cuts, fingers are being pointed and accusations are flying. Rachel Arrezola, Chief Deputy Press Secretary for Governor Schwarzenegger, spoke about the controversy, noting that “there is no question Every Woman Counts is an important health care program. Unfortunately, as tobacco taxes are a declining resource, the available revenues for the program have been outstripped by demand this year. This has forced the Department of Public Health to make some very tough decisions that we wish did not have to be made.”


Arrezola explains that the state legislature knew about the pickle this could create, and was “made aware of… the steps the department would need to take to ensure the highest-risk Californians continue to have access to the program. We continue to be open to working with the legislature on a solution that will cover as many women as possible without negatively impacting the state’s already depleted General Fund as we face another $20 billion deficit this year.”


The ultimate question is, should smokers continue to be held responsible for funding anti-cancer programs, or is it time for the legislature to divert resources, or simply cut programs such as EWC? It would seem that a representative’s pet project could be put on hold this year in order to help poorer women get free cancer screenings. Or perhaps it’s really all just the fault of the smoker?

Why isn’t he lighting up more already?!