Why should we think that government officials are better at acting “rationally” than those they regulate? Even if we were to concede that smoking deserves to be restricted, why should we think the government can do it in a reasonable way?
The moral of this economic story is that whenever someone who has an incentive to lowball the burden of a tax is speaking or writing, be careful to look at what happens to take-home income as a better guide to policy.
It is true that if labor becomes more efficient, workers must find other uses for the time they now have available. But why is this a problem? Human beings have unlimited wants, and there are always new uses for human labor.