Proposition 86: Tax on Cigarettes. Initiative Constitutional Amendment and Statute
If you've heard of any of this year's propositions, you've probably heard of this one. It's been on the receiving end of a blitz of negative campaigning, calling it another tax and decrying how only a minimal portion of its revenues will actually go to smoking prevention. Let's take a look at what it actually does and see how those ads might, just possibly, be shilling for big tobacco.
Prop 86 would add a 13 cent tax on each cigarette, and by extension (due to current California law) comparable tax increases on chewing tobacco and all other tobacco products. This would take the form of an excise tax, meaning that sales tax would be built on top of it. Funds pulled in by this new excise tax would go toward a number of health-related areas. First, money would go to backfill funds lost by Prop 10, which also taxes cigarettes. This would ensure that Prop 10's mandated early childhood development programs would not lose out just because people cut back on taxable smoking after the price increase. Of the money remaining after this backfill, 5% would go into the Health and Disease Research Account, funding studies on tobacco control and various cancers (breast, lung, other cancers). 42.25% would go into the Health Maintenance and Disease Prevention Account, providing health coverage for poor children, prevention and care programs for heart disease, stroke, obesity, diabetes, cancer, asthma and putting money into a number of tobacco control and prevention programs. Finally, 52.75% would go into the Health Treatment and Services Account, which would put money into nursing education, nonprofit clinics, tobacco cessation, rural health services and, above all, paying money to hospitals for emergency and trauma care given to people who can't pay.
On the face of it, it might seem hard to argue with taxing cigarettes (a health care cost for the state) to support state public health. Hey, some people might even quit smoking in response. The major complaints levied against this, other than the tired call of "it's another tax" (this is hardly an income tax...) are that most of it doesn't go to tobacco prevention, that it pushes money into "greedy hospitals," and that it exempts hospitals from antitrust laws.
To the first argument, I say "So what?" It's a straw man. Taxes from cigarettes don't have to go to fighting smoking. Heck, you could tax cigarettes (a luxury) and put the money into roads or public transit (necessities) and it would make perfect sense. Taxing tobacco and putting the money into health care is a good fit, but not a necessary one.
To the second argument, I might simply point out that Doctor's Medical Center in West Contra Costa County is closing after estimated losses of $1.5 million per month. If you want to fight medical costs, fight pharma. Don't think that avoiding a tax on a known cancer-causing luxury good that could help keep hospital emergency departments open is a good way to send some kind of message.
To the third argument, I direct you to the fact that the exemption is solely for the purpose of letting hospitals work together to arrange disaster emergency services that are mandated by this proposition. It's a cheap trick to suggest that trying to keep hospitals from getting into trouble for cooperating on disaster drills is some ploy by those hospitals to "pull one over" on us. As a solid counterpunch, the law limits hospitals in the amount they can charge low-income patients and in their ability to sic debt collectors on patients. I admit that when I heard of an antitrust exemption I was suspicious, but having read the text of the law, it's nothing. Certainly nothing like what the counter-ads suggest.
You can get a read for the purpose behind a campaign by the quality of its arguments. The anti-86 ads push hard on a straw man argument, distrust of medical costs and a lie by omission (they mention antitrust, but completely without its incredibly restrictive context). If someone has to mislead you to get your vote, you know even they don't believe their own position. Prop 86 is a positive, in more ways than one.
You can read the text of Prop 86 here.
Tobacco companies have spent more than $69.9 million ($69,900,000) opposing Prop 86. You can read more about that by clicking here.
You can read my other reviews and recommendations on the propositions by clicking here.
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