Long-time reader, first time commenter.
I very much enjoy your blog, but your concern about the impact of the loss of cigarette sales on retailers is tenuous at best.
Let's say I spend $40 a week on cigs. If I quit, does that $40 leave the economy? No, I simply decide to either (a) save it, or (b) spend it on something else. In my mind, I'd rather have people spend that $40 on something like dinner at a local restaurant, or perhaps save up $2000 for a year to help a kid go to college.
Yes, the $40 a week will leave the local convenience store - a micro-economic effect. But the macro-economic impact is probably better for the state, since there is a stronger likelihood for the $40 to be spent on (a) something that actually keeps more of the money local, and (b) something without long-term health impacts.
Of course, I could be totally wrong. The average Joe might take the extra $40 per week and go to the casino or buy a couple cases of Miller.
Actually, what I'm arguing is that if you quit smoking, you'll be spending that $40 on other items that are now more expensive as a result of the sharp decline in cigarette sales.
And if you decide to keep smoking, that's $1.25 per pack that will no longer be in the economy - it will be sent to the state to be spent (presumably) on human resources. That's less money people will have to spend to support their local economies, which would lead to lower employment, fewer sales taxes generated on other goods, etc.
Those Mom and Pop stores will certainly raise prices, but I would think they would also look for new products to sell.
More of the "special" magazines behind the counter and more alcohol next to the bottled water.
Doyle is forcing people from one vice to the other. Too bad it isn't from the new Miami Vice to the old.
A few poorly-written thoughts on DY's well-written take on the cig tax:
1) It completely ignores perhaps the best aspect of a dramatic cigarette tax increase: some kids will never pick up the habit. Will they still spend the money in their pockets? No doubt. Will they be much healthier in the long-run? Undoubtedly.
2) Businesses may lose some cig sales, but it's not that far out to say that customers will instead spend their PDQ-bound dollars on diet Coke, Slim Jims or a take-home pizza.
3) Businesses currently selling smokes will also benefit because lower-income workers - who smoke at a much greater rate than their more well-off brethren - are more likely to stop smoking and become healthier. Less sick time, more productivity, etc.
People can still choose whether or not to smoke - that's America. But I'm glad that when they make their choice they will now help support the costs we ALL pay in general taxes to the State that go for state-sponsored health care.
sb
If the cig tax goes up by $1.25 per pack, people will NOT quit smoking in large numbers, nor will teenagers be prevented from starting the habit in the first place. Smokers will simply make free-market decisions with respect to where they purchse their cigarettes.
A huge increase in the Wisconsin cigarette tax will merely shift consumer puchases to Indian reservations, the Internet and convenience stores just across the border in Minnesota, Illinois, Michigan and Iowa.
Let's not kid ourselves.
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