ABC's Top Doc Prescribes High Taxes for Smoking

On the one year anniversary of the death of Peter Jennings, the August 7 "World News with Charles Gibson" turned to medical editor Timothy Johnson for advice on how to quit smoking.

After listing some advice for what individuals can do, Johnson turned to a prescription for big government:

At the government level there are three proven techniques. One is to raise prices by increasing taxes, the second is to limit access by minors, and the third is to conduct mass media campaigns.

Of course there are plenty of critics who say those policies are utter failures, but Gibson did not seek a second opinion.

Here's what he might have found if he had:

Cato Institute senior fellow Robert Levy wrote on March 20, 1999, that “a $1.00 bump in price” from tax hikes “will mean $23 billion in potential black-market profits” for bootleggers, about four times the U.S. net income of America’s largest tobacco makers.

Four years later Tax Foundation economist Patrick Fleenor took an in-depth look at how high taxes on cigarettes create a crime-ridden black market for smokes, and a year later the General Accounting Office (since renamed the Government Accountability Office – GAO) found similar results.

“As cigarette taxes increase, so do the incentives for criminal organizations, including terrorist organizations, to smuggle cigarettes into and throughout the United States,” USA Today reporter William Welch quoted the 2004 GAO study in his July 24 article on a proposed 300-percent tax hike in California.

While Fleenor’s study centered mostly on New York City’s experiences with a black market, he found that smuggling related to tax evasion is a global problem.

For more, see my article at the MRC's BusinessandMedia.org Web site.

Ken Shepherd
Ken Shepherd
Ken Shepherd is the Managing Editor for NewsBusters