The decision to research and write this study was inspired first by the authors' recognition that tobacco taxes — and their unintended consequences — have spiraled upward in recent years. Federal and state lawmakers seem likely to propose even higher tobacco taxes in the months and years to come, and a professional evaluation of the past and projected effects of cigarette tax hikes seemed timely.

Our focus on taxes has meant that we have not dwelled on the risks of smoking. This does not mean we think tobacco usage is harmless for consumers. Rather, we believe our findings may help remind policymakers and the public that the debate over cigarette taxes would probably benefit from more nuance and balance.

Still, in many cases the urge to raise cigarette taxes seems to involve more than a cost-benefit analysis; it appears to be driven instead by a conviction that public policy should be used to eliminate smoking altogether. This is a moral conviction and deserves more than an accountant's ledger in response.

Smoking has been linked to serious health problems, and there is no question that heavy cigarette consumption is a risky habit. People who do not like cigarette smoking have a right to refrain from it and exclude it from their property. Yet using taxes and new laws to make citizens give up smoking in their personal lives raises important concerns about individual freedom.

Cigarette smoking is only one of many risky behaviors that people enjoy. Others include driving cars, riding horses, skydiving, overeating and casual sex. High taxes on these activities might eliminate some health risks and reduce the associated health care costs, but people do not always behave as expected. They often enjoy an activity precisely because it involves some risk. They may respond to higher costs by seeking to avoid the costs, not the activity, even when avoiding the costs is illegal. After all, that risk may become part of the attraction.

It does not take much imagination, especially after America's experiment with alcohol prohibition, to see that fighting this impulse could generate an intrusive enforcement regime and a growing disrespect for the law.[*] Intrusiveness and lawlessness would be more than just unpleasant: They could undermine people's pursuit of happiness. That pursuit may sometimes be erratic and wrongheaded, but it is part of the value and purpose of life. As U.S. Supreme Court Justice George Sutherland once said, "To give a man his life, but deny him his liberty, is to take from him all that makes his life worth living."[218]

As a society, then, we should be careful about marking people down for harsher tax treatment because they engage in certain personal activities. When taxation moves beyond a modest revenue measure, it can become a relentless social crusade, with each unintended consequence generating new reasons for more revenue and more enforcement.

Our fellow citizens deserve better than that. No matter how much we may want a tobacco-free America, a free America is important too.


[218] Hmura v. Police, 741 N.E. 2d 491 (Appeals Court of Massachusetts), quoting U.S. Supreme Court Associate Justice George Sutherland's address 1921 address to the New York State Bar Association.


[*] The similarities between the illicit activities attending high cigarette taxes and the illicit activities attending Prohibition have probably occurred to the reader. A review of the Prohibition era in Michigan makes the similarities seem striking indeed. We provide a short synopsis of Prohibition crime and smuggling in "Appendix B: Prohibition in Michigan and the Avenue de Booze."