Sunday, July 31, 2005

BBC NEWS | UK | Law ends UK tobacco sponsorship

It had always been a sneaking suspicion of mine that the result why our local government does not simply ban tabacco and let it go the way of the chewing gum was because of the revenue that could be raised from taxing the damn thing.

However, it was told to me (albeit indirectly) that this was not the case. Apparently, the tax revenue from such sin items were a small fraction of our total tax collection. I can't find the information on the net so I'm going to take it at face value for the moment.

But assuming that tobacco consumption patterns in the US is similar to that of Singapore, then for every 10% rise in the price of cigarettes, there's a corrosponding 6% fall in the number of teenagers picking up smoking. I'm not entirely sure what the number of smokers overall decrease but I think it's likely to be low.

So with those numbers in mind (10% rise in price = 6% fall in smokers) i.e. the demand for cigarettes is inelastic, there becomes a fantastic impetus and incentive for governments to bilk suckers *ahem* I mean smokers for all their worth. You raise prices, number of smokers fall but not by so much that it actually hurts your tax revenue. And assuming that smuggling and access to contraband cigarettes is not a problem (which it isn't in Singapore as far as I can tell), then you get the best of both world essentially.

Which brings me back to my original 'question' of why the government does not simply ban cigarettes outright. Partly because it does make economic sense (especially since smoking related diseases and illnesses are not directly borne by the government but outsourced to NGOs and HMOs) and also because banning it outright would be a losing battle in and off itself (kind of like the war on drugs as a whole, Singapore wins because of its top-notch enforcement more than anything else).

In which case, aggressive campaigning against smoking as well as limiting their ability to advertise would on first sight seeming to be an efficacious combination. However, if one were to take the effort to actually look at and read a cigarette ad, one would be hard pressed to discover how it could be seen (except very indirectly) as an inducement TO SMOKE rather than SMOKE THAT PARTICULAR BRAND. Most tobacco advertisment seems to be more an attempt to protect their own market share and to wrest away market share than any real attempt to gain NEW market share.

After all, why would one smoke? If you hate second hand smoke, try imagining it in a concentrated dose down your throat into your lungs. That keeps me away from smoking more than anything else (considering my eating habits, the health hazards of smoking are not large comparatively). And I have seen my cousin sneaking a puff everyday but never quite wanted to pick it up. In which case, perhaps there is a lot more truth in the concept of addiction being genetic (alcoholism tends to run in the family and not just because of the home environment). Or maybe its because cigarettes act as a forbidden fruit in which case would make it impossible to eradicate.

Does anyone still think smoking is cool? The ads don't give that impression, plus there are a lot more other things out there that are cool which does not include smoking. But what this policy does do is to deprive certain sports of a lot of money. More importantly, money like water on a pavement will find every crack and creavice.
So with one stroke, tobacco money to politics has just increased.

Which is worse? Tobacco money in sports or in government? Peace.


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