5-A Law of Diminishing Returns

A few thoughts on:

The Diminishing Returns to Tobacco Legislation

by Pierre Lemieux

From 1985-1995, the government increased taxes by 52 percent, and not surprisingly, a decrease in tobacco consumption by 18 percent soon followed. So it would appear that increasing taxes would help combat the issue of smoking, right?
Yes and No.
Higher taxes will definitely deter some who are not as deep into the throes of addiction, but for those who will puff on the cancer sticks at any cost, their disposable income gets smaller by with each year they stay hooked.
Pierre Lemieux writes:
“In order to maintain the antismoking movement's momentum, more and more regulations and taxes are required, which is also consistent with the interest of our large public health bureaucracies. Certainly, health bureaucrats have become addicted to power. One wonders what will be the next regulatory steps.”
Indeed, health bureaucrats to appear to be making a fortune off of addicts’ accommodation of the sky high taxes. But where does all this tax money go? Perhaps to truly make a mark in the combat against nicotine addiction, the surplus of sin tax money could be used to provide government funded treatment for smokers (prescriptions, over the counter aids, and addictions counseling), or for research funds to help develop a more effective quitting method. Scrap the expensive pack illustrations and get to the root of the problem.
It appears the government cares just enough about the health of smokers to slap a label on a pack of cigarettes, and safely avoid scrutiny in the process. But are they ready to transfer the millions of tax dollars they make on addiction to really helping smokers? Perhaps reforming their thought pattern would reduce the government diminishing returns.
Pierre touches on comparing the anti smoking campaign to the war on drugs. This is interesting, but incorrect. Nicotine is legalized, saving the millions of tax dollars spent on the incarceration the drug trade garners.
With a product as inelastic in tobacco, the cigarette industry clearly goes against the standard law of supply and demand. Prices go up, but demand stays the same. We have sin taxes and government agenda to thank for this phenomenon. The tobacco companies have it made. How they sleep at night is another story.