Good News: Smokers Pay Their Own Way

It is likely that cigarette taxes are near the external cost level at current rates of taxation. If the goal is for tobacco taxes to simply account for the purely external costs of smoking, then that policy goal has roughly been achieved.

Smokers cross subsidize Social Security, as well as Medicare, meaning smokers receive less in benefits paid out, even after accounting for the fact that they pay in slightly less as compared to nonsmokers…. around 13% more 24 year old smokers than 24 year old never smokers will pay into Social Security and Medicare, albeit at slightly reduced rates, but die before they reach the age of typical eligibility for benefits.

[M]ale smokers receive $5,264 less than nonsmokers from Social Security, and $2,763 less in lifetime Medicare benefits than nonsmokers. In Social Security, smokers just get benefits for a shorter period, on average. In Medicare, they get benefits for a shorter period, but are more expensive than average while doing so.

Full Austin Frakt article on the costs of smoking.

Comments (8)

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  1. Paul H. says:

    That is good news. Among other things, it means we can stop imposing more excise taxes on the poor.

  2. Lucy says:

    Amen to Paul’s comment.

  3. Devon Herrick says:

    Austin’s blog post on smokers is interesting. The social costs of smoking is $40 per pack. But when you remove the internal costs borne by smokes themselves ($33); and the quasi-internal costs borne by the smoker’s family ($5.50), that leaves an external cost of $1.50 per pack. That’s probably less than the tax on cigarettes in most cases. So, in other words smokers do pay their own way. And since smoking and drinking is highly correlated, the taxes paid on alcohol probably post the social revenue.

  4. Jeff says:

    Right on. No more taxes on poor smokers.

  5. Bart says:

    Here’s what I would like to know. If smokers are paying their own way, why do we need to continue to harass them?

  6. Candace says:

    It’s difficult to measure the value of a life and good health in dollars and cents. So if secondhand smoke is as damaging as some experts have said, that’s why they are not left alone.

  7. Nutthida says:

    Smoking is an adcdition only he can beat and only if he wants to. You can not fix an adcdit or any other personality disorder only the adcdit can. Giving him nicotine gum without his knowledge is a very bad idea, there are extreme health risks there. An unknown heart disease that can even be prevalent in young people. Nicotine poisoning (over dose of nicotine can kill.) Nagging, threatening or money doesn’t change the habit either. I don’t like the word habit though a habit is involved as well as the adcdition. This tends to soften the reality that it is an adcdition. One of the hardest to kick by the way. And you are not going to kick it unless you really want to. Like any other habit it might take several attempts to quit.If you want to help prayer is a power full tool, even scientist recognize this, but don’t pray that he gets sick when he smokes that is not a prayer but a curse. How would you like to get sick every time you did something you couldn’t help. Besides it might make him miss school or work. Better to pray that he looses the desire and takes an interest in what it is doing to his health. Add that the cravings, habits involved will go away and it will look unattractive to him. A couple of times when I tried to quit I found my self reaching for my top pocket or bringing my hands to my mouth. Some people start chewing or sucking on pens and pencil. I finally quit with prayer and have no cravings or after habits. Unfortunately I waited to long and there is some breathing problems. Shortness of breath. You see I started at 13 and didn’t quit till I was 50 something. When he is ready there are on line help tips. If you poo poo prayer keep in mind that a lot of adcdition programs, such as Alcoholics Anonymous and Narcotics Anonymous recognize a higher power and spirituality is one of the cycles involved in the cure. Go to a church and get some people to pray with you. the bible refers to one or more gathered in His name. I like Pentecostal or spirit filled churches because there faith in healing by prayer is strong. You perhaps noticed in the news that faith healing that were going on in Lakewood.Hope this helps.

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