This Note estimates the lifetime discounted costs that smokers and drinkers impose on others through collectively financed health insurance, pensions, disability insurance, group life insurance; fires; motor vehicle accidents; and the criminal justice system. Although nonsmokers subsidize smokers' medical care and group life insurance, smokers subsidize nonsmokers' pensions and nursing home payments. On balance, smokers probably pay their way at the current level of excise tax on cigarettes; raising those taxes, however, could reduce the number of adolescent smokers. In contrast, drinkers do not pay their way: current excise taxes on alcohol cover only about half the costs imposed on others.
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