It's enough to make a tax donkey fume

A sales tax on candy bars and an increase of 50 cents a pack in the tax on cigarettes: that is the joyless way the House Democrats propose to pay the doctor bills of 40,000 children of the middle class.

Advocates don't call them middle class, of course; they call them poor. But poor means below the federal poverty line, and these are kids in households 75 to 150 percent above that line. We're talking two parents and two kids with a household income of $32,200 to $46,000. These children have been getting Medicaid in Washington only for a few years, and would not qualify for it in Idaho, Montana or Oregon.

Well, the subsidized care exists, and we are asked to pay more. Why not load the entire burden on smokers? That might be a popular decision. In November 2001, Washington voted by a ratio of 2-to-1 for Initiative 773, which raised taxes by 60 cents a pack, with money to go to the Basic Health Plan. That put our tax at $1.425, then the highest among the states.

It was a distinction many were proud of. Since then, four states back East have raised their tax to $1.50 or $1.51. Shall this state go to the proposed level of $1.925?

First, someone ought to question fairness. Why should smokers pay the doctor bills of kids too young to smoke? This is not money for emphysema and lung cancer. It is for ear aches and broken arms.

The answer is that smoking is bad, and we need to discourage it. Thus, smokers are taxed "for their own good," though the state does not really want them to quit. The state's concern is rhetorical only. It needs a group of tax donkeys who will smoke and pay.

Smokers may have other ideas. They will be comparing Washington's $1.925 tax with $1.28 in Oregon, 28 cents in Idaho, 18 cents in Montana and zero at certain Indian smoke shops, military bases and on the Internet.

Price-sensitive smokers purchase by the carton. The price of a 10-pack carton of Marlboros at a Safeway last week was $47.32. Assume the House Democrats add another $5, then add sales tax of 8.8 percent in King County. That carton is at $56.92. Plenty of U.S. Internet sites sell the same product for $22 to $30. A Swiss Internet site, www.yesmoke.com, which also escapes the 39-cent U.S. government tax, is offering a carton of offshore Marlboros delivered postage paid for $14.95.

Is it legal? No — unless you send in the taxes just evaded.

Is it easy? Apparently.

Are the people doing this consumed with guilt? Maybe a few are. Others take the attitude of Dave in Everett, who writes to an Internet site that he buys all his tobacco out of state, he knows it's illegal and doesn't care.

Already, tens of thousands of fellow citizens are taking this attitude. The Department of Revenue estimates that already 35 percent of cigarettes smoked in Washington are smuggled. If the tax goes to $1.925, Department of Revenue folks forecast lawful sales to drop to a level at which (assuming the amount of smoking stays the same) 44.7 percent of cigarettes will be smuggled.

Will raising the tax to $1.925 produce net revenue at all? The Department of Revenue says it will. But smuggling will probably cut the gain by more than half.

The other new tax offered to pay for state medicine is sales tax on candy and gum, which have been classified as tax-exempt food products since 1978. Like cigarettes, candy and gum stand condemned as unhealthful, so that politicians can claim to be doing people a favor by taxing them.

Under this proposal, sales tax would apply to such products as Double Bubble gum, See's Candies, Snickers bars and Pez. It would not apply to Ben & Jerry's ice cream, Snickers Ice Cream Bars, QFC German chocolate cakes, Oreo cookies and Krispy Kreme donuts.

Why one group and not the other? Obviously, the distinction is not health.

My theory it that it's mostly kids who will most notice the price of a candy bar going from 65 cents to 71 cents (in King County), and kids don't vote.

That's one theory. Another is that the House Democrats are saving ice cream, cakes, cookies and donuts to tax next year.

Bruce Ramsey's column appears regularly on editorial pages of The Times. His e-mail address is bramsey@seattletimes.com