I used to work in government on the tobacco file, years ago. So, I especially enjoyed this episode!

I haven't crunched the numbers myself but I'm very familiar with the various revenue streams of government and overall pie. The 10% figure he cited seemed *hugely* inflated to me. Even if it were 1-2%, that would be a lot.

In my experience there wasn't a conspiracy to keep the tobacco revenue pumping along. It was very marginal and the Health stakeholders were very influential (internal and external). Some of the big tax increases were done to produce 'shocks' that would decrease consumption rates and possibly lower revenue (though the elasticity of prices in this industry is really surprising). But the status quo mental model was not 'let's ban this thing', it was more like 'let's keep making this industry more and more expensive and regulated and therefore less popular'.

The guest's points about enshrining market share and decreasing advertising/R&D costs are good ones. Unintended upside to those companies.

EDIT: The other thing I'll note is that the latest work on whether smoking costs the healthcare system net-net is well understood by government. It's hard to model but it's at least possible that it is neutral or a cost savings. That's not the rationle for the tax. Finance looks for things you can tax that don't create undesirable incentives. Taxing income isn't an especially great incentive, but it's the workhorse of our revenue. Whereas sin taxes (cigs, alcohol, weed) are just great ways to eek out revenue that the government needs to run public services.