My smoke free life

There is an article in The Examiner today.

Smoking trends point to ‘day off’ for Noonan

Now I fail completely to grasp the reference to “Ferris Bueller’s Day Off” as I have never seen the film [and don’t intend to – not my type of film], but it got me thinking on this whole business of taxation and smoking.

Most people are under the misapprehension that the tax on cigarettes is to “discourage” smoking and to “help” smokers to quit.  This is a load of bollox, of course.  If the gubmint wanted to force people to quit they would either lump a €50 tax per pack or would ban tobacco entirely.  This of course would result in a loss of a massive source of revenue for them to the tune of around two billion a year.  It is far more lucrative for them to just hike the tax every year which brings in a couple of hundred extra million.

However the overall tax take is now dropping for two reasons. 

There is naturally a sector who have been forced out of their smoking simply because they can no longer afford it.  While the Puritans will celebrate this and claim a victory, I think it is morally reprehensible to force people to give something up that they would otherwise enjoy.  It’s a case of bullying people into the Puritan’s camp “for their own good” simply because of an ideology an the part of the Puritans and greed on the part of the gubmint.

The other factor is of course the electronic cigarette.  People are switching over, partly because they have been suckered in by the Puritan’s propaganda, but mainly [I suspect] because they are vastly cheaper.  The natural progression for the gubmint is to levy a similar tax on electrofags as is currently levied on cigarettes.  The problem here is of course the lack of an excuse for such a levy, but doubtless the gubmint will come up with one.

Now I am stuck in the middle here.  I have no wish to take up electrofags for many reasons, principally because I don’t enjoy the flavour, the sensation or the whole business of sucking on a mechanical device.  They are great as a cigarette substitute but are miles behind the pipe.  Nor am I going to quit smoking just to satisfy a bunch of smug puritans in ASH or the Irish Cancer Society.  I hold them with more contempt than I would for a dog turd on the sole of my boot and I just wouldn’t give them the satisfaction

So I have to either pay the extra tax or source my tobacco elsewhere.  Of course they tell me that the black market money goes to fund criminal activities but I don’t care – the revenue on “legitimate” tobacco also goes to fund criminals so what’s the difference?

Actually, I’m not that bothered by the tobacco tax.

You see, I get two pensions.  There is one from my old employer which is sufficient to cover my basic needs in life and there is another much [much] smaller one from the gubmint which is paid to me each week.  Coincidentally, that latter pension very neatly covers the cost of my tobacco and cigarettes for Herself, with a little bit left over.  So the gubmint is actually paying for my smoking which is grand.  And seeing as the pension is probably funded by tobacco taxes, the two cancel each other out so my smoking is free, courtesy of my gubmint.

Every pack I buy gets a full rebate from the gubmint!

Nice?

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Comments

My smoke free life — 7 Comments

  1. Politicians are the same the world over. Earlier this year the Australian Treasurer Scott Morrison announced that with the changes to tobacco tax the government expects to raise $5.1 billion over the next four years. Then he went on to say:-

    “These changes will improve the health of Australians by reducing their exposure to tobacco products….” which I assume means smokers will quit smoking. But if smokers quit there goes the $5.1 billion.

    I get my government pension, I go straight to the tobacconist and get my fortnights ration of one 50g pack of Borkum Riff Black Cavendish which costs me $66, about $40 of which is tax and one pack of Rothmans cigarettes which cost $18 of which about $14 is tax. They give with one hand and take it back with the other. And they wonder why the tobacco black market is growing.

     

    • It’s this pretence that they are “helping” me to quit that really pisses me off.  If I want help I will fucking ask for it.

  2. A first year economics class in University should be enough to tell you that taxes on products such as alcohol and tobacco are largely due to their inelastic nature… Heck, even a HIGH SCHOOL economics class tells you that.

    What is “inelastic nature,” well, it’s what I’m calling a relatively inelastic demand. That means demand changes less than the price change, so a $1 increase in a cigarette package leads to say a 0.5 reduction in packets sold, for example. This is due to the lack of “close substitutes.”
    Some goods are perfectly inelastic – say a “miracle drug” related to some disease, or illicit drugs like amphetamines. This means people are willing to pay whatever the price is, and their level of demand never changes.

    For example, butter and margarine are used as examples of goods which have a relatively elastic demand curve. If the price of one increases, demand tends to decrease at a higher level than the price. That assumes everyone who eats butter will eat margarine, and vice-versa.
    Naturally some goods are perfectly elastic, which means any increase in the price will result in the demand falling to zero – this would be a market where “perfect competition” exists.

    The point of all this, taxing alcomahol, tuhbakkah or anything along those lines under the muse of “public health” is utter rubbish. They tax these things because it looks good, and because taxing relatively inelastic goods is actually quite efficient, as demonstrated above.

    But I digress, everyone here knew that already. Ha.

    • The problem for the gubmint though is the rise in elecrofags and the proliferation of smuggled cigarettes.  By providing an alternative, they have introduced a level of elasticity into the market where there are now two viable alternatives to paying tax.  The gubmint isn’t going to allow a couple of billion slip through its greasy fingers.  I hope they get a massive headache trying to sort that one.

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