Tobacco - The Regulatory Cash Cow

Source Article: Coming Down on Tobacco - NY Times
(See Article)

Implications:
1) Tobacco regulation has not reduced number of smokers
2) Increased taxes a key feature of regulatory schemes
3) Global rules are to benefit who - governments or smokers?

Analysis:
Tobacco contains a highly addictive ingredient, nicotine. This is why regulators treat it the way they do.

Once people become addicted to anything, be it legal tobacco or alcohol, or legal or illegal narcotics, one of the key regulatory themes of the agencies charged with controlling these substances is the financial component of taxation.

Smoking is clearly a self destructive and unhealthy habit, and within the last few days, we have extended our tobacco awareness to include "Thirdhand" smoke; it is becoming clear that the toxins from tobacco smoke can effect surfaces and materials negatively long after the smoke itself, either of the "Secondhand" or primary (directly inhaled) variety, is gone.

It is clearly good public policy to regulate tobacco sales and consumption, and the fact that an essentially worldwide consensus on how to treat tobacco has been reached, well, this is a great step towards trying to reduce use even further. This remains the ultimate regulatory goal.

Taxation of "Vice" goods is wielded over the users of the "bad" or addictive, substances. They are made to pay for the oversight and regulatory mechanisms that are to protect them, but never are the taxes set to the point where a legal market becomes a prohibitively expensive way to consume the product, making it into a contraband substance that would be subject to criminal penalties.

That's what "Coming Down" on the Tobacco firms would really be...Taxing the consumer market for tobacco products to the point of making legal consumption too expensive for all but the most wealthy.

Prohibition didn't work very well as a social experiment here in the US, so lets figure that completely prohibiting tobacco sales is a non starter, for good reason. With all that being said, the number of regular smokers hasn't dropped in the US in some time, although cigarette consumption is down. Maybe making the habit more expensive is controlling the rate of consumption, but it isn't deterring people from using.

So with a regulatory mechanism and hierarchy in place that can really set worldwide rules for how the tobacco firms can act, it should make it harder for children to be targeted for marketing, which needs to be the primary focus of any regulatory scheme.

And, at the same time the governments continue to milk the cash cow of tobacco regulation. But it's not the tobacco companies who pay, as always, it's the consumer.