I have no real interest in the SCHIP brouhaha and am puzzled by Bush's to veto a bill that would expand children's health insurance. This can't be a very sensible move, politically-speaking. Anyway, my only interest in the matter was in the proposal that it be funded by taxes on tobacco. I was interested to see (former smoker) Matt Yglesias say this:
The bill would also raise cigarette taxes, which, again, is a good thing to do since higher cigarette taxes cause either more revenue (a good thing) or else less smoking (a good thing) or else some combination of these two good things.
Well, ain't that a pretty thing: let's make the poor pay for health insurance for middle-income people. Now you may say that this is fine; poor people should be discouraged from smoking too. Fine. But most of them won't be and will, consequently, be paying for SCHIP. It's a very regressive way to do these things. (Indeed, the supposed concern for the poor smoker is bogus: you need them to keep smoking otherwise you can't fund your program. So the task is to find the optimum level of tax that won't drive folk to the black market. You need smokers, otherwise how can you exploit them? All of which would be fine if it weren't accompanied by the sanctimonious tut-tutting so characteristic of the health crusaders).
My suspicion is - if memory serves - that the available evidence from the UK and other countries with much higher tobacco duty than the US is that cost is the significant factor for a minority of smokers who choose to give up the noble weed. Most grudgingly accept price hikes as the costs of pleasure/addiction. Or they bypass unjust rates of duty by purchasing smuggled or otherwise contraband cigarettes.
The bottom line is that raising tobacco taxes is really just punishing the poor for habits the wealthy disapprove of. (The same is true, of course, of proposals for "fat taxes"). I'm tempted to conclude that this means that if you really want to help the poor you would - at least in highly-taxed places such as New York - reduce tobacco duties to the healthy level enjoyed by citizens of, say, the Carolinas...