Ever since President Bush’s veto of a bill that would have increased SCHIP funding at the expense of a cigarette taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. hike, the supporters of the bill have predictably come forth with the “You don’t care about the children” line. Continuing that logic, I guess the citizens of Seattle, home to a city that voted over two-thirds for John Kerry in the 2004 election, don’t care about children either because back in 2003, they rejected by a 2-1 margin a measure that would have raised taxes on coffee to fund early childhood education programs in the city. From the Seattle Post-Intelligencer:
Across Seattle, Initiative 77 left voters facing a difficult proposition: Should latte drinkers pony up an extra dime a cup to pay for child care and preschool programs?
The tax, formally known as the Early Learning and Care Campaign, would have raised money for preschool programs and continuing education for teachers.
For Seattle coffee drinkers, it would have meant an extra 10 cents on any cappuccino, latte, iced drink or Americano sold at a cafe, restaurant or coffee stand.
Early on, the measure was criticized by opponents, many from the coffee and restaurant industry. They labeled it as an unfair and regressive taxA regressive tax is one where the average tax burden decreases with income. Low-income taxpayers pay a disproportionate share of the tax burden, while middle- and high-income taxpayers shoulder a relatively small tax burden. on their product.
Supporters said the money was desperately needed to ensure children are prepared and ready to learn when they walk through the doors of kindergarten.
So were the people of Seattle demonstrating a lack of concern for the welfare of children when they voted against a tax on coffee that would have paid for greater access to early childhood education? Fast-forward to 2007 where President Bush has said no to a plan to raise a tax on a single arbitrary product (cigarettes this time, not coffee) to pay for greater access for children’s health care, and he is labeled heartless. So either the people of Seattle and the President don’t care about kids, or the voters and politicians think it’s okay to go after one arbitrary group – smokers–but not another arbitrary group — coffee drinkers.
The fact of the matter is that only if cigarette taxes are too low due to the negative externalityAn externality, in economics terms, is a side effect or consequence of an activity that is not reflected in the cost of that activity, and not primarily borne by those directly involved in said activity. Externalities can be caused by either production or consumption of a good or service and can be positive or negative. they impose on society should they ever be increased. Cigarettes or any other arbitrarily chosen product (like coffee) should never have its tax increased merely because someone wants to fund a program that supposedly provides broad public benefits. Such programs should be funded via a broad-based tax increase like that on sales or income.
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