According to a new poll, 62 percent of Hoosiers would support a $1 increase in the cigarette tax if the money were used for health initiatives (of course, the poll was commissioned by a coalition of anti-smoking groups, so there might be a little "getting the results they wanted to get" going on here). This news must have stunned Gov. Daniels, who keeps getting thumped for suggesting even a 25-cent hike, and it should give pause even to those who see smokers as the preferred target group of sinners for getting more endless amounts of new money. Whenever a price increase is contemplated for any product (such as newspapers, which I know a little about), there are very carefully done studies to pinpoint the price increase that would be the most workable. Every increment of increase will bring in x amount of new money but would decrease demand by y amount, decreasing current revenues. They usually arrive at a precise price increase for which it is determined that the amount of new revenue will exceed the loss of current revenue -- go one step above that, and there will be a net loss.
Granted, predicting the behavior of smokers isn't quite so easy since tobacco is, you know, addictive and all. Still, history tells us that price increases decrease smoking, and a $1 jump all at once might be a little risky in terms of killing off the goose with the golden eggs.
So to speak.
