Politique Internationale — You speak of the State’s “tax addiction.” How does tobacco taxation illustrate this?
Benoît Perrin — Tobacco brings in 13 billion euros in taxes to the government every year, while our public deficit stands at 160 billion euros. The government cannot do without the revenue generated by tobacco consumption. It is dependent on the taxes it has imposed. If all French people stopped smoking overnight, the government would be forced to create a new tax that is just as lucrative. Ultimately, it’s easier for the smoker than for the government to quit. We could also say that taxes on tobacco or gasoline are “the good kind.” They consist of an excise tax, VAT, and VAT on the excise tax. Thanks to these products, the government is thus able to tax the tax. How could any Ministry of Finance possibly deprive itself of such a windfall?
P. I. — Does the government have a financial interest in maintaining a certain level of consumption?
B. P. — Some claim that tobacco costs more in terms of healthcare, prevention, and behavioral issues than it brings in through tax revenue. The argument has always struck us as somewhat theoretical. The inflow of 13 billion euros in revenue into the state coffers is a certainty, whereas the savings expected from a drop in consumption are purely speculative. Does treating the cholesterol of someone who quits smoking and gains 10 kilos as a result really cost less than treating smoking-related illnesses? Tax policy should not have been moralised by using tobacco to generate easy tax revenue. As we have already said, it is undoubtedly easier today for smokers to do without tobacco than it is for the government to do without the tax that comes with it.
P. I. — Can we reconcile declining consumption with stable tax revenue?
B. P. — Tobacco consumption generated 14.4 billion euros in 2020 and only 13.2 billion in 2024. The government should have been delighted by this, and yet it did not come across as good news. With the ideologization of taxes, the government has reached the point where it hopes the situation does not improve, so as not to be deprived of this windfall that the tax represents—hypocritically presented as a means of combating the scourge. This is schizophrenic and perhaps revealing of the psychological makeup of those who impose such taxes. Moreover, the sensible response, if 13 billion less were to flow into the public coffers, would be to reduce spending by the same amount. Yet we all know that would not happen. A tax that disappears is unfortunately always replaced by a new tax and not offset by the elimination of an equivalent expenditure. This is the tragedy of our era and our society, addicted to spending and hooked on taxes.
P. I. — Do you consider behavioural taxation (tobacco, alcohol, fuel, etc.) to be legitimate in principle?
B. P. — Behavioural taxation is, by its very nature (no pun intended), illegitimate, since the role of taxation is not to punish or reward citizens, but to have them contribute to the community’s expenses in the most balanced way possible. Tobacco, alcohol, and fuel should therefore be taxed like shoes or the latest Tesla, that is, like any other consumer product. It is normal for gasoline to generate significant revenue for the government because people drive a lot, not because they pollute. Behavioural taxation must be prohibited because it is not the role of taxation to encourage or discourage moral or immoral behaviour, because it is perverse to finance the State through citizens’ vices and flaws, and also simply because it makes no sense. If a behaviour is dangerous to the individual or the community, we do not tax it; we must ban it. The illegal use of a firearm can lead to prison, not to the tax office. Thank goodness, no one has yet proposed taxing cannabis to help consumers quit. Trying to regulate behaviour through taxes is, at best, absurd; more often than not, it is hypocritical; and at worst, it is dangerous.
P. I. — Have the repeated price hikes on packs of cigarettes reached a ceiling in terms of effectiveness?
B. P. — In reality, the government is stuck in a rut created by its own tobacco tax system, which follows the Laffer curve principle that too much tax kills tax revenue. When a product becomes too expensive due to rising taxes, it eventually sells less well and automatically generates less tax revenue. Yet, instead of being content with receiving less from tobacco, the government ends up lamenting it because it still needs that money. The fact that the Laffer curve is bell-shaped may, once again, reveal the psychological mindset of certain individuals at the French Ministry of Finance.
This is particularly the case for tobacco that is too expensive and ultimately yields less for public finances because smokers will simply source their supply legally across borders or illegally on the black market for tobacco, which is, by definition, all the cheaper for being tax-free. A case in point is cannabis, which is fortunately illegal, and is for that very reason also tax-free. However, when we reach the point of putting more taxes than nicotine in tobacco, taxfree cannabis ends up costing the average smoker less than tobacco, as certain studies show. Misapplied taxation therefore leads to a doubly harmful result. Tax revenue decreases while smokers poison themselves even more.
P. I. — Is tobacco taxation a socially unjust tax insofar as it disproportionately affects low-income households?
B. P. — Smoking tobacco is not a crime, even if it “kills.” Otherwise, it would be outright banned. So, when consuming a pack of cigarettes a day costs over 400 euros a month—of which nearly 300 euros are taxes, that is, almost a quarter of the minimum wage—we can say there is social injustice. Because of the tax, tobacco becomes either a product for the wealthy or a source of ruin for the poor. Financial ruin, but sometimes physical ruin as well. We have seen that cannabis could ultimately end up being cheaper than heavily taxed tobacco. It will therefore attract certain consumers who can no longer afford to buy cigarettes and will turn to drugs because of the taxes.
P. I. — Should public policy prioritise prevention, or other less harmful forms of tobacco, rather than fiscal penalties?
B. P. — Obviously, the State would then be fulfilling its role. Without making smokers or drivers feel guilty, it seems appropriate for the State to warn of the dangers inherent in such behaviour or consumption when they are excessive. Beyond that, the State should first and foremost combat drugs, which are a true scourge. Is it normal for the law-abiding citizen to be hit with heavy taxes because they smoke legally, while the drug user in an illegal situation is offered, at the State’s expense, the necessary equipment to use drugs safely—and on top of that, with free medical assistance? The world is going mad.
P. I. — What, in your opinion, would be a coherent policy that does not rely primarily on taxation?
B. P. — It’s hard to summarise, but let’s try to rely first and foremost on common sense and reality. Let’s give to Caesar what is Caesar’s and to God what is God’s. That is to say, let taxation handle the financing of the State’s sovereign duties, and let responsibility guide citizens, whether they smoke or not. Especially since the State and its representatives aren’t always the sharpest psychologists and sometimes overlook concepts like the allure of what’s forbidden, the spirit of contradiction, or weariness. While repetition is a pedagogical method, it is also a form of habituation. We then achieve the opposite effect. Just as too much tax kills tax, too much prevention breeds indifference. Let us therefore return to education in the noble sense of the term, rather than coercion. In the past, it was considered proper to ask one’s neighbours if the smoke bothered them. Today, it’s confrontation through regulations. Yet the law is not the solution to all our problems.
P. I. — Is tobacco taxation today a health policy or a revenue policy?
B. P. — Both. The result is ever-decreasing revenue and no improvement in health. If this tax policy weren’t absurd, then why wouldn’t the government offer a tax credit to non-smokers or pedestrians, backed by a medical certificate or phone records?
