According to a recent report by the Abell Foundation, use of cigarette in Maryland decreased since cigarette taxes were raised from $1 to $2 in 2008. Predictably, many politicians and public health officials will cite this study to advance their argument in favor of higher cigarette taxes for Maryland.

The report, however, largely neglects the lopsided nature of Maryland’s smoking problem, which is an important ingredient to finding an optimal cigarette tax policy for Maryland. Although page 12 briefly alludes to policy debate that “low-income individuals would be disproportionally impacted by the tax,” it does not acknowledge that certain group’s economic losses may offset any marginal health gains through cigarette use reduction.

Although the cigarette tax is a common textbook example of a “regressive tax,” Maryland provides a particularly good example. According to 2015 data from Maryland Department of Health, Maryland’s cigarette taxes target less educated and impoverished families. While 28.5 percent of the Maryland adults with annual household income of less than $15,000 are currently smokers, just 8.9 percent with income over $75,000 are currently smokers. Meanwhile, 28.2 percent of Maryland adults with less than high school diploma smokes, while only 5.6 percent of college-educated Marylanders smoke.

Maryland’s smoker demographics is even more uneven at the county level. According to County Health Rankings and Roadmaps, 24 percent of adults smoke in Baltimore City while 20 percent smoke in Somerset County, the two lowest-income areas in the state.

In contrast, only 9 percent smoke in Montgomery County, the richest county in Maryland. This supports the observation of Patrick Fleenor, chief economist at the Tax Foundation, who noted, “We can safely conclude that the cigarette tax transfers funds from areas with high smoking rates to those with low smoking rates.”

The evidence is clear that the cigarette tax disproportionately hits low-income families and counties, but this is only a small part of a bigger problem. Research finds that smokers of lower-income class find it harder to quit because they are often more severely addicted and tend to live in neighborhoods where others smoke.

One justification for a cigarette tax could be that the revenue would be used to help smokers quit. But that is not what the revenue is used for in Maryland. Only a small portion of Maryland’s revenue collected from tax is used to help smokers. In fiscal year 2017, Maryland received an estimated $553.9 million in tobacco settlement payments and taxes, yet only allocated $10.6 million in state funds to tobacco prevention. The majority of cigarette tax revenues were redirected to fund programs that do not necessarily benefit the ones who paid them.

Despite the ample evidence that cigarette taxes hurt the poor, Maryland’s politicians have continually insisted on higher cigarette taxes. Over the course of 15 years, Maryland has raised taxes on cigarette three times. As of 2018, Maryland’s cigarette tax of $2 per 20 cigarettes is higher than the national average of $1.71 and of 78 percent of the other 50 states.

The question is, why?

Politicians’ rhetoric may be about helping addicted smokers, but these same politicians seem to be suffering from an addiction to taxes and spending. Part of the rationale for past cigarette tax increases has been to raise money to close the structural deficit, the state’s ongoing gap between projected spending and revenue. Revenue goes up, and yet the structural deficit remains. Lawmakers from both parties in Annapolis seem unable – or unwilling – to take real steps to control spending. It is no wonder that Maryland’s fiscal deficit is expected to grow up to $1.5 billion by 2022.

Maryland’s cigarette taxes end up exploiting lower-income Marylanders to satisfy the spending needs of the state’s legislators. This is poor public policy because it ignores the standard principles for assessing the equity of taxes. It is also risky because relying on cigarette tax revenue to address fiscal gaps encourages legislators to continue depending on tax dollars from the poor instead of getting to the bottom of its spending problems.

Instead of using the pretext of curing Marylanders’ tobacco addition to justify higher cigarette taxes, legislators need to overcome their own spending addiction. Doing so would provide a much greater benefit to our state than higher tobacco taxes.

Carol Park is senior policy analyst at the Maryland Public Policy Institute. Marc Kilmer is senior fellow at the Maryland Public Policy Institute.