Thursday, August 04, 2005

The impact of a health impact fee 

If you smoked and quit, what did you do? For many of you, you ate. And ate. And ate.

Daniel Gross
notes that women smoke much more in France, and they're thinner. Looking at a study like this, he notes that there might be a connection.
Nicotine is a stimulant, which means that smokers burn calories faster. And it's an appetite suppressant, which means that smokers eat less. Consider "French Women Don't Get Fat," the best selling book. Some critics said that the real reason chic Parisian women stayed trim while gorging themselves on croissants was that they smoked more than their American counterparts.

Indeed, conventional wisdom, soundly rooted in the personal experience of millions of former smokers and in several studies, has long held that short-term weight gain is the price to be paid for quitting smoking. But economists are increasingly applying their tools to measure the way monetary incentives, or disincentives, affect all sorts of human behavior - and hence the ability of government policy to alter it. And they've been wondering whether high cigarette taxes, which are intended to encourage people to quit smoking, may have the unintended effect of redirecting them from one form of unhealthy behavior to another.

And on top of all that, the nervous eating that results from people quitting cigarettes could lead to lower wages, as employers pay less to compensate for the higher costs of insuring their hefty employees.

Some impact. Will the health impact fee be extended to kettle chips?

Remember who to thank for those extra ten pounds.

Andrew Chamberlain shows the logic of this position of using the tax code to improve health and makes a point I've made here already:

The old Pigovian logic of using simple excise taxes to "correct" externalities from things like smoking and over-eating�an idea subjected to a thorough refutation more than 40 years ago by economist Ronald Coase�has probably led to more bad policy than any other single idea in economics.

Once we accept the logic that the tax code can legitimately be used to tax and subsidize any behavior in society that emits externalities�however small or speculative in nature�we've given license to tax and subsidize essentially every action in the social world.