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A Misguided Tax

It's January, and that means two things are certain in Wyoming: snow will fall and some in the newly convened state Legislature will try to raise taxes. One tax proposal now making the rounds in Cheyenne, House Bill 242, calls for raising the state tax on smokeless tobacco products from 20 percent to 40 percent of the wholesale price. This is an ill-conceived idea that should be quickly snuffed out by more clear-thinking members of the Legislature.

Advocates of this higher tax on smokeless tobacco products assert that there is a two-fold reason for their plan: it is needed to raise state revenues and it would benefit the public health.

The first assertion is easily refuted when one considers that Wyoming has an expected state budget surplus of a billion dollars this year. Government at all levels should take in only the amount of money necessary to provide for those services needed by the citizenry. To take in any more than that is both a breach of faith with the taxpayers and a drain on the economy.

The second reason cited for raising tobacco taxes -- a presumed benefit to the public health -- is often accepted without question by many people. Many reach the conclusion that it is OK to tax tobacco products. This is, after all, one of the so-called sin taxes, because everybody knows that tobacco is "bad for you." A closer look at the facts, however, shows that we should not jump to this conclusion so quickly. A growing body of scientific evidence shows that not all tobacco products are equal. In fact, medical research shows that cigarettes are significantly more dangerous than smokeless tobacco. And keep in mind that it is smokeless tobacco that some in the Legislature now want to tax more heavily.

Dr. Brad Rodu, a researcher at the University of Alabama at Birmingham, places the health risk of smokeless tobacco at only two percent of that of cigarettes, based on his studies. Dr. Rodu also cites several decades of real-life experience in Sweden to bolster his conclusions. For many years men in Sweden have used more smokeless tobacco than in any Western country. They also have the lowest smoking rates. But what is most significant is the fact that they also have the lowest rates of lung cancer and other smoking-related deaths in the developed world.

From these facts, Dr. Rodu has concluded that for many people a switch from cigarettes to smokeless tobacco would actually result in what he calls "harm reduction." This harm reduction concept was re-enforced by another key study conducted last year by a group of public health experts led by David T. Levy of the University of Baltimore in Maryland. The Levy study found that "Based on the available published scientific literature as of 2003, there seems to be consensus that [smokeless tobacco] products pose a substantially lower risk to the user than do conventional cigarettes. This finding raises ethical questions concerning whether it is inappropriate and misleading for government officials or public health experts to characterize smokeless tobacco products as comparably dangerous with cigarette smoking."

By the same token, it obviously raises the question of whether politicians such as those in the Wyoming Legislature who use public health as a reason to raise taxes on smokeless tobacco have been made aware of these recent developments. It is worth noting that the Levy study was funded by a grant from the National Cancer Institute, an organization that has a well-deserved reputation for shedding light on the health risks of tobacco, from which over the past several decades we have all benefited.

Now it is time to shed some light on proposals to raise state taxes on smokeless tobacco products. That light shows that those purported reasons melt like snow under the warm sun of a Wyoming spring.

A native of Big Horn, Wyoming, Senator Wallop served in the Wyoming Legislature from 1969 to 1976 and represented Wyoming in the United States Senate from 1976 to 1994. He is the chairman and founder of Frontiers of Freedom, a public policy organization dedicated to limited government, individual freedom and preservation of constitutional rights.