THEIR good sense and prudence have never prevented elected officials from approving poorly conceived or downright bad legislation or policy proposals. The usual primary consideration among many politicians is, of course, political: can we pass this measure without angering a majority of voters? Not exactly “populism”; just “popularism.”
For all the endless talks (“since ever since”) against wasteful spending and the need for fiscal responsibility etc., etc., has there been a bill introduced to significantly cut government spending by abolishing several redundant offices/agencies/programs/services and/or significantly reducing the number of government employees? What about measures to impose hefty income (and other) tax hikes or new taxes on all taxpayers to pay for the programs and services that many now consider as entitlements?
As a former president of the European Commission would put it, referring to elected politicians: “We all know what should be done, it’s just that we don’t know how to get elected afterward.”
Now no one is for smoking or for using tobacco whose harmful effects are well-documented and well-known, even to tobacco users. It is not unpopular to propose a tax hike on tobacco products.
In 2013, when the CNMI House was considering a cigarette tax hike, one lawmaker noted that it could “incentivize” wholesalers/retailers to bring in cheaper cigarettes. The Saipan Chamber of Commerce, for its part, told lawmakers that raising cigarette taxes would not necessarily result in reduced smoking, and would “further increase the underground distribution of cigarettes.”
Last June, the CNMI House unanimously passed a tobacco tax hike measure, H.B. 22-54, which is now in the Senate. Depending on who you ask, its proponents say the bill would help reduce tobacco consumption and raise revenue for CHCC and the Division of Customs. Basic arithmetic says that can’t be possible. But then again, most politicians are good-hearted persons who believe that simple math is optional. Incidentally, it is also the Legislature that passed a bill to raise the annual pay of its members, but whose end result was a well-deserved paycut for lawmakers.
Taxing the poor
IN a recent op-ed published by The Wall Street Journal, Tom Giovanetti discussed the U.S. Democrats’ proposal to double the federal excise tax on cigarettes from $1 to $2 a pack. The goal, he added, “is to influence behavior by raising the cost and thus discouraging the purchase of cigarettes. But this policy has diminishing returns. Most smokers who are willing and able to stop have already done so, thanks to a decades-long public-education campaign and the easy availability of smoking-cessation options.”
The president of the Institute for Policy Innovation, Giovanetti noted that the “still-smoking population is concentrated largely among the poor. A 2017 survey by the Colorado School of Public Health found that ‘half to three-fourths of smokers have one or more low-socioeconomic disadvantages, and the lowest socioeconomic categories have the highest smoking rates.’ … The lower your income, the more likely you are to be a smoker. Of Americans who earn less than $35,000, 21% smoke, while only 7% of Americans who earn over $100,000 do.” In other words, the tobacco tax hike would affect Americans with the lowest education and lowest income.
Giovanetti said a “more compassionate response would make it easier for smokers to vape and use electronic cigarettes, which are up to 95% less harmful than regular cigarettes. Moving smokers to such products would create significant improvement in public health.” However, he added, the U.S. Democrats also want to tax reduced-harm nicotine products at exactly the same higher rate as cigarettes.
Not to worry CNMI. The Commonwealth bill, H.B. 22-54, would also impose “a 75% levy on the invoice price of tobacco substitutes, or vaporizable products and vaporizers, liquids, chewable tobacco products, or other smokable or snuffable substance, material product that contains nicotine, other than cigarettes.”
Feeling healthier already?