Smoking not only affects the smoker's health, but also the health of their children, friends, and family from second hand smoke. The American Heart Association estimates that 35,000 non-smokers die each year from the effects of second hand smoke on the heart (AHA, 2003). .
Smoking during pregnancy increases the chance of a baby being born with low birth weight or other complications, which results in more expensive health costs. If a smoker becomes seriously ill and can not work, then they may become dependent on the government for housing and medical costs (in-kind transfer payments). Many smokers become addicted in their teens when they might not fully understand how addictive and harmful cigarettes can be.
Some people argue that higher cigarette taxes unfairly target the poor. "A study by KPMG Peat Marwick found that families making less than $30,000 per year pay more than half of all the taxes paid on cigarettes" and "families making more than $60,000 pay only 14 percent" ("Do Higher Cigarette," 1994). However, the lower a family's income, the more an increase in the cost of cigarettes will be felt by their budget, thus giving the poor a higher incentive to quit smoking. Governor Jesse Ventura summed up his position when he said, "If you don't want to pay it, don't smoke" (McMahon, 2002, p. 1).
Governments also try to reduce smoking by other means. They pass laws on the advertising of tobacco and selling cigarettes to minors. Warning labels are required on all products. The government funds anti-tobacco campaigns, which we see on television all the time. There has also been recent legislation passed in New York and Florida placing restrictions on smoking in public places. Lately, there have been arguments for the government to provide subsidies on products such as nicotine gum and the patch to help people quit smoking. .
Higher taxes on cigarettes can also result in some unintended consequences from smokers trying to avoid paying the tax.