A Case for a Higher Tobacco Tax

2010-03-10 / Community

submitted by Erin Robinson

“Tobacco Money Pays My Bills” could be seen on many bumper stickers in my rural Georgia hometown 20 years ago. Although I have not seen one in a while, I understand that we still have our share of tobacco farmers in the state, even if significantly less than back then. My grandfather grew tobacco, my father cropped it, and my older brother worked summers in it. My cousin supports his family on it and one of my best friends is building a career on it. So why in the world would I support legislation proposed in Georgia’s Capitol to tax it? Because it makes sense.

Until the federal government is willing to relax a mandate on hospitals to provide free care to all comers, we are saddled with the dilemma of how to pay for it. Part of the solution should be to tax the substance, and behavior (smoking), that contributes to the cost of care to begin with. If I’m honest, I don’t like it any more than you do. But the only way to ensure that some people pay their share is to col- lect it on the front end at the point of purchase. The ‘provide the service, then bill the recipient’ approach to financing health care is fundamentally flawed – there is no collateral and virtually no means to collect. This approach is nearly bankrupting our state government and, more importantly, denying finite resources to other equally necessary public services such as criminal justice and childhood education.

Georgia spends an estimated $2 billion dollars per year on tobacco related health care services. The existing tobacco tax revenue to pay for those services is only $162 million - a mere 8 percent of the total cost. Who pays for the remaining $1.8 billion? An adult male who currently receives state Medicaid health insurance and smokes one pack per day will pay $135 in tobacco taxes per year. The state will pay an average of $2,500 per male Medicaid beneficiary for tobaccorelated health services per year.

House Bill 39, currently proposed in the Georgia General Assembly, would increase the tobacco tax by $1 per pack of cigarettes. This would add $365 in tobacco taxes per year to the smoker in the illustration above. Not to worry, this still leaves plenty left over for you and I to pay for.

Georgia’s tax on cigarettes is currently the fifth lowest in the nation. A 2008 poll on the issue suggests that 75 percent of Georgians are in favor of increasing the cigarette tax to help cover the cost of state-subsidized, smoking-related health services. However, many members of the General Assembly may oppose such legislation based on either philosophical grounds, or the belief that you will vote against them if they support it. In either case, your informed voice needs to be heard.

With all due respect to our proud tobacco farming heritage (my own included), we cannot allow it to blind us from the one thing that we in rural Georgia are even more proud of – common sense.

Rhett C. Partin Executive Director

Center for Rural Health Georgia Hospital Association

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