Friday, November 10, 2006

Cuyahoga County Approves Cigarette Tax Increase to Fund the Arts

Voters in Cuyahoga County, which includes Cleveland and its suburbs, approved Issue 18, which increases the tax on cigarettes by 30 cents per pack in order to fund arts programs, including the performing arts in the county. The measure is expected to raise $20 million a year, all of which will be used to support the arts.

Two years ago, Cuyahoga County voters rejected a proposed property tax increase that would have provided funding for the arts. According to the Cleveland Plain Dealer, a decision was made to tax smokers because other types of taxes were deemed to be politically risky: "Issue 18 was the county cultural industry's second attempt in recent years to win voter support for public funding. In March 2004, voters defeated a proposed property-tax increase to benefit economic development including arts and culture. Arts and elected leaders decided to pursue public support this year through a cigarette-tax increase after other types of taxes, including property, real-estate conveyances, food-and-beverage and general sales, were rejected as inadequate or too politically risky."

In explaining their decision to propose a tax on cigarettes, Issue 18 supporters wrote: "Northeast Ohioans have clearly shown that they do not want new additions to their property taxes."

The advertisements for Issue 18 boasted: "If you don't smoke, you won't pay anything for Issue 18."

The Rest of the Story

This is very bad public policy. I think it is a great example of a truly regressive tax.

The costs of the policy are borne entirely by smokers, who represent a disproportionately lower-income and lower-education group. The benefits of the policy, however, accrue primarily to upper-income and higher-education groups.

This is a classic example of tax the poor to benefit the rich. And I think it's inappropriate.

If higher income people want more arts in their communities, then that's great. But the costs of those programs should be borne by those higher income folks. Raising property taxes to support such programs makes perfect sense. The wealthiest citizens will bear a proportionately higher share of the costs and will accrue a corresponding proportionately higher share of the benefits. That's fair.

But asking the poor to pay for programs so that people who are more well-off can enjoy the arts is unfair.

What's interesting is that supporters of Issue 18 readily admit that they are funding the arts on the backs of smokers. And they readily admit that the reason they are picking on smokers is because they don't have the courage to take on any political risk.

What it amounts to is: I'm not willing to risk losing any votes from the wealthy, so I'm going to help my political career by putting a higher tax burden on those who can least afford it, but who have the least political power.

According to the Plain Dealer article, the only groups which opposed Issue 18 were Philip Morris and Citizens Against New Taxes. Well you can add my name to that list. I'll stand alongside Philip Morris on this one. And I think it's unfortunate that apparently no anti-smoking or public health groups in Ohio opposed this initiative.

If you are going to tax cigarettes in order to raise revenues that will be used for programs whose benefits will accrue largely to smokers, then that's one thing. But to use smokers to raise funds for programs that the government should be funding anyway is wrong. To do so in order to avoid having to take on political risk by taxing wealthy people is disgusting.

A 30 cent per pack tax increase is not going to be enough to get smokers to quit. Perhaps some will cut down slightly. But the overall health benefits of the proposal will be minimal. The costs, however, could be quite high. There are many smokers, especially those who are poor, who pay a significant proportion of their income for cigarettes, sometimes at the expense of healthier food. Because of the addictive power of cigarettes, most of these smokers will not quit, despite the tax increase. They will just pay a higher proportion of their income for the cigarettes. They will be hurt by the tax increase.

But supporters of Issue 18 are OK with hurting the poorest and most addicted smokers. Because the richest citizens of the greater Cleveland area will benefit by being able to enjoy their operas, ballets, and concerts.

How many inner-city Cleveland residents or poorer residents of other cities and towns do you think will be able to take advantage of the increased support for the arts? Well take a look at next Friday's Cleveland Symphony concert, which features Mitsuko Uchida performing Mozart's piano concertos (K. 450 and K. 537), as well as a performance of Schoenberg's Chamber Symphony Number 1 (to be honest, I could live without the Schoenberg piece).

If you want to sit in the orchestra or lower balcony seats, you're talking $61 a pop. Mid-balcony seats are $50 each. Upper balcony (nose-bleed) seats are a bargain at $34 per head. There's sure going to be a lot of socioeconomic diversity at that concert.

And suppose you are not too well off economically and you want to send your kid to the Karamu Performing Arts Theater for their youth performing arts program this year. For your kid to get to go to one class every two months, you pay $225. For a mere one class per month, you pay $360. Youth dance ensemble and youth performance theater classes are $300 a head.

In my view, anti-smoking groups should have been on the front lines opposing this regressive tax proposal. Taxing the poor to benefit the rich is not consistent with the social justice paradigm that is supposed to be the basis for all public health action.

No comments: