Between smoking bans, taxes and public disdain, smokers are in their most difficult era in centuries. Rothman notes the almost incomprehensible tax burden on smokers, with cigarette smokers faring the worst. While we’re not much interested in cigarettes here, Rothman’s calculations are too startling not to consider carefully:
“Under the guise of protecting the public and our youth from the dangers of the filthy tobacco weed, and through the continuous dissemination of trumped-up numbers pertaining to the amount of deaths and health care costs attributable to tobacco, the government has conveniently absconded with 90 percent of the revenue generated by the industry. That’s right – 90 percent of the money paid by the public on all tobacco products goes right into the coffers of federal, state and local government.That is monstrous, and a lesson to those who value freedom. United States Chief Justice John Marshall, writing the majority opinion in the landmark McCullouch vs. Maryland decision way back in 1819, noted that “the power to tax involves the power to destroy.” That’s exactly what the anti-smoking lobby, aided by our government, is trying to do, as Rothman concludes:
“Look, I don’t want to bore you with a million numbers, so let’s just look at the cost of one pack of cigarettes on Wall Street, since every news article seems to view that as the center of the universe during this economic downturn. Even of a company like RJ Reynolds or Philip Morris gave its cigarettes away free, and every tobacco distributor passed on the cigarettes to retail shops free, and every retail shop gave the cigarettes away free, the federal and state tobacco taxes alone, plus the 8.375 percent New York sales tax, would result in a price of $5.70 per pack!”
I was always taught that government here in the United States was instituted to protect our individual rights. Today, it seems that concept has been changed to one where government gets to decide what our individual rights are. I fear for the future of our great nation. Things have gotten out of control.”
Smoking bans mean less business
It also notes, quite clearly, that it’s hardly wise to take anti-smoking advocate claims about this subject at face value. The authors note on page 2 that “Research on the effects of a smoking ban on casino revenue has to date focused on the state of Delaware, which implemented a smoke-free law in December 2002. In the first study on the subject, Mandel, Alamar and Glantz (2005) found that the smoking ban in Delaware had a negative but statistically insignificant effect on gaming revenue. After correcting for errors in the Mandel, Alamar and Glantz (2005) study, Pakko (2006) found that the smoking ban in Delaware casinos resulted in a loss of $6 million, which represented a loss of over 12 percent relative to the average monthly revenue in the year preceding the smoking ban. In a subsequent study, Pakko (2008) examined the effect on individual casino revenue in Delaware as a result of the smoking ban, with a total revenue effect of approximately 15 percent. Finally, Thalheimer and Ali (2008) estimate a system of slot machine demand equations for the three Delaware casinos. They find that the smoking ban in Delaware reduced gaming demand by nearly 16 percent.” (Emphasis added; the Mandel, Alamar and Glantz study was produced by anti-tobacco activist researchers.)
The current study notes that in 2007, prior to the imposition of the smoking ban, Illinois casinos generated almost $2 billion in revenue and about $805 million in state and local governmental tax revenues. A careful review of the data from the Illinois casinos compared to competing casinos geographically close by in neighboring states of Indiana, Iowa, Missouri and Michigan showed that the smoke-free Illinois casinos had revenue drops of 20% and attendance drops of 10% in 2008 overall; the authors concluded that “the impact of the smoking ban on total admissions amounts to around 10 percent, with our point estimates indicating a downturn of 9 to 13 percent. These estimates imply substantial losses in tax revenue for the state and local communities which host casinos: total casino tax revenue was down by approximately $200 million.”
The only Illinois casino which did not see as much of an impact is located in Peoria and more than 90 miles away from the next closest gaming facility. That suggests that where smoking-allowed and smoke-free casinos are located close to each other, the smoking-allowed facility is going to do better absent other factors, but location and competition make a difference.
“Casinos aren’t the only businesses to suffer with legislated smoking bans,” added Chris McCalla, legislative director of the International Premium Cigar & Pipe Retailers Association (IPCPR). “And when business goes down, employees are eliminated or the businesses close. That means loss of jobs and loss of tax revenues. Nobody wins.
“We’re not against individual business owners declaring no smoking on their premises. It’s their right to do so. It’s local, state and federal governments that should not interfere with the rights of individuals.”
What about restaurants? Anti-smoking advocates shriek with authority that smoking bans do not hurt restaurants and bars, but in a footnote on page 1, Garrett and Pakko wrote: The anti-smoking lobby wants people to think they have truth on their side. This new study, along with others it cites, begins to paint a much more balanced picture that is, in fact, much closer to the truth.
Posted by Rich Perelman on August 20, 2009 at 10:49 AM in Commentaries | Permalink | Comments (0) | TrackBack (0)
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