Sample CTQ Discuss Forum Response

For this Discussion Forum, I am analyzing a June 2012 CBO report on the potential impact of raising taxes on cigarettes. The United States government spends approximately $1 trillion USD on health care programs annually with the hope that such a huge investment will lead to savings down the road by preventing hospital visits, medical procedures, medication usage, and associated comorbidities related to the issues these programs are trying to address. These programs vary but ones that many people might be familiar with include exercising more, eating more fruits and vegetables, and perhaps the most popular onequitting or not starting smoking. This report looked at the impact of a 50 cent tax per pack of cigarettes and forecasting the potential impact.

From a monetary perspective, the tax increase would increase federal revenues by $41 billion and reduce overall spend by less than $1 billion through 2021the end of the 10 year window for the purposes of this report. The report notes most of the increased revenues ($38b) would come from the tax itself. $3 billion would come from improvements in health, namely increased productivity as people's health improved. While the tax would help reduce spending on Medicare and Medicaid, it is interesting to note that Social Security spending would increase slightly as people lived longer. While the report only projects 10 years out, the overall net result of deficit reductions would continue for 50 years due to the overall improvement in people's lives based on reduction or deterrence of smoking.

CTQ: Does the government have the right to impose such a tax that would influence people's health and behaviors? Would this tax unfairly impact people of lower socio-economic means?

Source: "Raising the Excise Tax on Cigarettes: Effects on Health and the Federal Budget." Congressional Budget Office. June 2012.