What would happen to the US economy if smoking were made illegal?

[Phillycat]

No, I'm not interested in having yet another thread about smoking vs nonsmoking. I am interested in the economics of the question. The federal, state, and local governments continue to pass laws that make smoking difficult and inconvenient for smokers, yet they haven't tried to make it illegal.

(I'm also not interested in a discussion about the merits of banning substances and what happened during Prohibition and how it doesn't work anyway. I want to know about the ECONOMICS of it.)

How much money do the tobacco companies contribute to the GNP? And we all know they contribute to Republican politics. Is tobacco a cash crop that the US economy needs to stay afloat? Do we sell it overseas? Is it an important export? Does the stock market rise and fall significantly based on how the tobacco companies fare?

I'm not an economist, but I am curious about this. Thanks.

[havocmom]

1. Eventually, smoking related medical costs would lessen?

Might be less costs for fighting some brush/forest fires?

[MonkeyFunk]

7. yes

but then other medical and long-term care costs would increase.

Dying of a heart attack at 60 is a lot cheaper than dying of alzheimers at 90.

[Beelzebud]

10. And you'd have a new black market, drug war, and people in prison and/or fined.

[Cerridwen]

15. Or increase?

Since cigarettes would still be available on the "black market" but would not be subject to the token regulations currently in place, cigarette makers could include any substance in "black market" cigarettes. I'm reminded of stories about alcohol used to justify regulation of the alcohol industry before, during and after Prohibition. Prohibition was not just a bunch of religious tea-totalers getting together to kill everyone's fun. There were valid reasons for wanting to regulate the making, selling and safety of alcohol.

I'm not sure what percentage of brush/forest or even other fires are due to cigarette smoking. Making smoking illegal could potentially cause more fires as people would be less inclined to keep ashtrays or other safe containers used to extinguish cigarettes, around their smoking areas. Rather than putting one's cigarette out in the car ashtray and having proof of illegally smoking, some might be more included to toss the butts out the window. I can imagine ways in which there might be more instances rather than fewer instances of fires started due to panicked attempts at hiding cigarettes.

[itsmesgd]

2. As is the way when you make a behavior illegal

A huge black market would pop up and take the place of traditional corner stores. A criminal-corporate underworld would start buying police and other officials. The price would rise five-fold over night.

(In other words), I'd change careers and start bootlegging smokes

[TahitiNut]

14. Yep. More crime. More criminals. Less taxes, More jails.

Sure sounds like a Reichbot 'plan' to me. :eyes:

[napi21]

3. Sin taxes will NEvER go away. The btd's in charge realize the

economy could never withstand it!

I have no idea how to find out how much money is collected in the US on cigarettes & alcohol, but I guarantee you it's in the billions!

[EstimatedProphet]

4. It would seriously impact government revenues

There's a LOT of federal tax on cigs.

[phantom power]

5. I'm pretty sure it would fail as prohibition failed. Maybe even worse,

since nicotine is more addictive than alcohol. Or just about anything else, for that matter.

[stevedeshazer]

6. Crime would increase

The costs to the criminal justice system would be enormous. Millions of nicotine addicts would become instant criminals.

We already incarcerate per capita far more people than any other country in the world.

Not just the prosecution of smokers, but through the related black market. Car break-ins, burglary and robbery rates would skyrocket in order to feed a swelling underground smoking crime industry.

[rubberducky]

8. I would probably be put in jail.

Then I couldn`t pay my mortgage, credit cards, utility bills, etc. Then the taxpayers would be supporting me and I would have health care(finally), 3 squares and shelter. I realize that this is a very unintended consequence of what you asked, but this is purely a personal consequence.

[Dora]

9. What would replace the industry?

Those involved in the growing, production, and processing of commercial tobacco crops will be out of work. What industry will replace the loss of Big T?

Legalized industrial hemp production could do it. As well, hemp products can be used in or contribute to other industries and thereby it has a greater market spread, whereas tobacco is limited to personal consumption only.

[no_hypocrisy]

11. You mean it would have the same criminal status as marijuana?

If so, there would be an underground economy based on sales of the contraband without the benefit of collecting tax on the them. You'd have cigarette gangs fighting for turf on which only they could sell cigarettes, organized crime having drop-off points where they'd pick up crates of cigs. Imported cigs as they won't be made here anymore, resulting in some economic distress in the regions where tobacco is grown and cigarettes manufactured. Tobacco farmers would have to suddenly switch to a different but less lucrative product to grow, perhaps resulting in some bankruptcies.

[don954]

12. stock in nicorette would skyrocket! :)

[porphyrian]

13. The Carolinas would go into depression, if not a revolt. - n/t

[onenote]

16. here's how it would screw the economy

If that party was the Democratic Party, it would ensure a sizable repub majority in the House and Senate and then the economic policies pursued by the repubs would really fuck things up..

[WI_DEM]

17. I don't think that "prohibition" on smoking would ever happen

yes, they are getting strict about where you can smoke, but I think people will still be allowed to buy tobacco and smoke in their own homes.

[dkofos]

18. Billions in lost tax revenue. Cigarettes would replace pot as the

easiest to to procure black market item.

You would have to outlaw tobacco to put a dent (a minor one at that) in the tobacco co's.

[Deb]

19. '03 NYS cig tax revenue- $ 1.12 Billion

NEW YORK, NY March 05, 2007 —New York loses an estimated $270-million a year in tax revenues in sales of untaxed cigarettes on Indian reservations. And a state senator from Westchester says the way to get some of that revenue is to negotiate with Indian tribes to collect the cigarette taxes and split the revenue with the state.

State Senator Jeff Klein says while the state cigarette tax increased in 2002, tax receipts have declined from $1.12 billion in 2003 to $979-million in 2005.
http://www.wnyc.org/news/articles/74711

I don't know about other states.

[mainer]

20. Lifespans would increase. Social Security would be bankrupt.

Just something to think about!

[Cerridwen]

21. Here are some numbers and a link for you...from the USDA

The Changing Tobacco User's Dollar, October 2004.

Expenditures on tobacco products of the United States trended upward for many years, reaching a record high $88.2 billion in 2002 before slipping to $86.7 billion in 2003.

In 2003, State and local excise tax collections were estimated at $11.4 billion, compared with $8.0 billion in 1998. State excise tax collections have exceeded Federal excise collections since 1986.

Federal tax collections in 2003 were $7.3 billion compared with $5.3 billion in 1998.

In fiscal year 2003, tobacco products accounted for 0.42 percent of total Federal tax receipts and represented nearly 12 percent of total Federal excise tax collections.

The U.S. marketing bill for cigarettes totaled $58.3 billion in 2003, compared with $35.4 billion in 1998. Marketing costs represented about 72 percent of consumer spending on cigarettes in 2003,...

The excise tax share of expenditures has slipped slightly during the last decade, with the State and local tax share rising more than the Federal share. The State sales tax share also declined. However, actual tax collections have increased sharply in dollar terms.

Farmers received about 1 cent of the consumers' cigarette dollar in 2003, compared with 2.1 cents in 1998.

In 2003, U.S. growers provided less than half the tobacco made into cigarettes as imports from Brazil, Argentina, Malawi, and Thailand increased.

Although consumption has been trending downward since 1981, expenditures continued to increase due to rising taxes, expenses associated with the MSA, and increased business expenses.

link to .pdf version of report

edit to add: I don't think USDA reports are copyrighted so I included a couple more than 4 paragraphs. Mods, please let me know if I am incorrect.

[mdmc]

22. lots of dead folk in the ghetto

:kick:

[TX-RAT]

23. They'll make up for the lost revenue.

With more tax's.

[SheilaT]

24. Health care costs would probably

go down. Smokers often have long, expensive, lingering illnesses. It's not as though they simply smoke merrily away and then die quickly and cheaply. And yeah, some of them would simply have long, lingering illnesses later on in life. Meanwhile, there would be lots less lost productivity at work, since no one would be going outside to smoke a cigarette or three every forty-five minutes or so. Oh, and by the way, smokers get more colds and flu and other such trivial things and so miss more work to begin with.

As it is, smoking is down from more than half of all adults to about a quarter of all adults, and tobacco companies are making more money than ever. They've simply switched their markets to other countries.

Maybe tobacco farmers would take up raising other crops. I understand they make much more money from tobacco than they can from any other crop, but I also understand that tobacco does a number on the soil fairly quickly. Maybe they'd go into some other kind of sustainable crop. I know! Something to produce alternative fuels!

Over the years there have been many disruptions to economies as something or another is no longer consumed, or falls out of favor or falls to changes in technology. Eventually, the market and the economy adjust. Sometimes it's more painful than other times.

When I was an information operator in the late 1960's, I was told that if all calls were still going through operators, as was the case before direct dial was introduced in the 1930's, that by that time the phony system would have needed every single woman in America to be working as an operator to handle all the calls already being made. I have no idea how many people are currently employed as operators, but it's a small percentage of the work force.

Things change. I personally wish that every smoker out there would decide voluntarily to stop smoking.

[MonkeyFunk]

28. actually

many smokers DO die quickly - of a heart attack.

Non-smokers often die of long, lingering diseases, too, and the older one gets, the more likely one WILL get such a disease.

Alzheimers, parkinsons, various cancers, or just plain old age.

Ya gotta die of something.

[hfojvt]

25. we export billions of dollars in tobacco products

but that would not be affected if smoking was illegal here. Perhaps it would be better if it was not combined with greed. Greed makes it more available, and results in more being sold, advertised, etc. Sell and market to kids to get lifetime customers.

In 2000, our exports totalled 781.9 billion. Tobacco was 1.222 billion and cigarettes were 3.3 billion. So 5 billion out of 781.9 does not seem huge (but it's 50,000 jobs at $100,000 per job!!!), and both were down from 1997 (1.5 billion and 4.4) while total exports were lower in 1997 at 689.2.

Have you started smoking again?

[Phillycat]

26. Uh...yeah.

Heh. Call-out!

[nealmhughes]

27. Backy bankrolled the American Revolution. Backy bankrolls many states'

and counties' tax base. Looking at one pack of cigarettes I see a city tax of 6 cents and a state tax I cannot read. That is on one pack.

Were cigarettes, pipe tobacco, or any other form of the noxious stink weed become illegal, I daresay the good people of the US would rapidly become skilled cultivaters themselves. By the way, most people don't know this, but most of the leaves used in the wrapper for US cigars are grown along the Connecticut River and not in TN, MD, NC, VA or KY!

Wrapper backy is also grown in Canada...

I think that there would be a bumper underground crop and a tremendous loss of revenue as well a huge demand on rice paper and pipes.

[slackmaster]

29. The country would go bankrupt trying to enforce it

More police, courts, and prisons to prosecute and punish tobacco bootleggers.