Letter to the Editor: Tobacco Taxes No Way to Fund Medicaid

Published February 8, 2010

A cigarette tax increase is not a reliable way of raising revenue, and the brunt of the burden will fall disproportionately on lower-income individuals (“Taxes key in competing health legislation,” Feb. 3).

Tobacco taxes are an unsustainable and risky way to fund health care, because they rely on a very narrow tax base and encourage smuggling and other untaxed purchases. This unreliable tax revenue stream will dry up, but of course Medicaid costs will keep rising. It won’t be long before these tobacco tax advocates come back looking for more money from all Georgia taxpayers, not just smokers.

It is no surprise that states with higher “sin” tax rates often have higher overall tax burdens as well. In the end, Georgia legislators need to focus on giving more control to consumers and reforming the state’s inefficient Medicaid program.

The Heartland Institute
Chicago, Ill.

This letter to the editor was originally published in the Savannah Morning News.