Ultimately, I think that the group asking for more cigarette taxes seems to be more interested in the goal of stopping smoking, rather than focusing on the true end, which is maximising social welfare.

Robbie’s probably right about smokers killing themselves off early and raising total welfare; however, I think I might have an ethical problem with a government that aimed to boost welfare by encouraging people to kill themselves early. The counter to that is that smokers WANT to smoke so you’re improving their surplus as well as society’s. I think that the research on time inconsistency I mentioned above suggests that that isn’t the case.

However, as they don’t live as long they also provide less work hours, and so pay less income tax. As a result, even if a smoker had a lower lifetime health care bill, the fact they pay less income tax suggests that some form of cigarette tax could be corrective.

Of course you could make the argument that most of them die before getting super, implying that the nation gets all there income tax, but then doesn’t have to pay as much for there health or retirement, and the rest of us benefit. I like it 😉 . Maybe I should convince random people on the street to take up smoking.

The following study suggests that healthcare costs in the US would fall initially, but rise in the long term if all smoking were to cease: http://content.nejm.org/cgi/content/abstract/337/15/1052