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Oregon Lawmakers Seek Cigarette Tax Increase

1 min readBy: Gerald Prante

In the name of extending health coverage to uninsured Oregonians, a bi-partisan group of Oregon lawmakers hopes to raise the state’s 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. . From the Corvallis Gazette-Times:

The lawmakers’ proposed initiative for the 2006 ballot would boost the state cigarette tax by 60 cents a pack. Sponsors say the tax hike would help provide health insurance for nearly 200,000 low-income Oregonians who currently have no coverage.

Oregon voters have shown a willingness in the past to support cigarette tax increase, and Westlund, the Bend senator who is co-sponsoring the new plan, said he thinks the state’s voters will strongly favor another increase.

“Most Oregonians recognize the fairness of taxing a product that makes people ill and has the greatest impact on health care costs of any product sold in the state,’’ Westlund said. (Full Story)

A common argument in favor of cigarette taxes is that they are necessary to counteract the negative externalities they impose on society, such as the costs smokers allegedly impose on state health care systems.

What’s often overlooked is that there are many other ways in which smokers actually save governments money, primarily by having shorted expected lifespans and therefore imposing lower burdens on Social Security, Medicare and Medicaid. As morbid as it may be, numerous studies confirm that smoking overall is a net-positive for government finances, not a 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. .