The most obvious such consequence of government interference in the economy is a drag on economic growth. With punitive sin taxes on cigarettes, there is a further unintended but entirely predictable consequence that is making news once again in this great, nosy nation of ours [Canada]: contraband smokes. The artificially high price of legal, heavily-taxed cigarettes, at $50 or $55 for a carton of 200, has created a demand for cheaper, black market cigarettes. And currently selling for around $15 a carton from the back of a pickup truck near you, these babies are priced to appeal to the underage set.
The response from the mainstream media has been predictable, too―predictably
superficial, that is. The Toronto Star
editorialized that the boom in black-market smokes was "poised to ruin young
lives" and supported the call from health groups for "a crackdown." CBC News
parroted the call for more law enforcement,
as did Carly Weeks in The Globe and Mail.
There is a case to be made for preventing children and teens from engaging in certain activities. Their minds and bodies are not fully developed yet, and drugs can interfere with that development, in addition to the harmful effects adults face. But children and teens do not generally have a good appreciation of how their actions will affect them in the future. This is why it makes sense for adults to limit their range of options, only gradually giving them more and more freedom until they become adults in their own right.
How much of this control over children's upbringing should be entrusted to the state, of course, is another question. Ideally, parents should be the ones to determine how much freedom to allow their dependents. Still, I can agree with the generally held view that cigarettes should not be sold to children and teens. We'll never be able to eliminate teen smoking, but we shouldn't be facilitating it, either. That's why we do need to stem the flow of contraband cigarettes. It's just that a crackdown isn't the answer.
If we can't even keep illegal drugs out of prisons, we're kidding ourselves if we think we can find a law-enforcement solution to the problem of contraband smokes. If we squeeze an aboriginal reserve here, an illegal importer will bring more in through the ports. If we monitor the ports more closely, someone else will grease his palm smuggling cheap product across the border. There's only one thing that will effectively deal with the problem: dropping punitive sin taxes. That's how the flood of contraband cigarettes was stopped in the mid-1990s, and that's the only way it will be stopped now.
But if the price drops, won't kids be more attracted to smoking? The important thing is that if the availability of contraband drops, enforcement of laws restricting the sale of tobacco to minors becomes more feasible. Convenience-store owners, after all, are much more likely to be deterred by the threat of fines than criminals are to be deterred by the slim chance of capture by police.
And why, exactly, are we taxing cigarettes so heavily to begin with? Yes, smoking is harmful to one's health, but one's health is one's own business. Yes, second-hand smoke is annoying and (maybe) harmful to others, but we are all free to associate or not with smokers and to patronize or not establishments that cater to them―or rather we were, before banning smoking in bars and restaurants came into fashion. Yes, smoking might raise your future health-care costs, but it might also lower them by killing you younger―and at any rate, this is actually a good argument against one-size-fits-all universal health care. (See Adam Allouba's article on this issue.)
The truth is, there was never any valid justification for trying to manipulate competent adults into giving up smoking by levying punitive sin taxes on cigarettes. Now that we see that efforts to curb adult smoking are leading kids to smoke, will we come to our senses? If we won't do it out of respect for the rights of adults to live their lives as they see fit, maybe we'll do it… for the children.