Last Cigarettes Are All You Can Get

So a group of Delegates is proposing a new health care bill that expand health insurance coverage in various ways, with funding coming from a hike in the tobacco tax. As health care plans go, it's OK; it expands coverage in some ways, but doesn't make any fundamental changes to the system.

The tobacco tax part is getting a lot of attention because of the budget situation, but I'm skeptical of its use as the basis of a health care proposal. Normally with Pigouvian taxes you isolate the behavior or substance you want to reduce, tax it, and then distribute the money as you see fit. Since the object isn't to raise money, but eliminate some social ill, how much money you do raise isn't that important.

With this plan, however, how much you raise is very important, particularly when health care costs are rising as much as they are. The Maryland Citizens' Health Initiative claims, regarding an earlier version of this plan, that the tax would raise "$211 [million] the first year and conservatively, at least $170 [million] each subsequent year," which sounds a little fudged to me, given the downward trends for smoking. (Although if the CDC is correct, that trend may be flattening out.) I'd be interested to see if this sort of scheme is feasible, but I'd rather see a more comprehensive -- and sustainable -- proposal.