The data does not show that government taxes and regulation have been responsible for declines in smoking. At the same time, government approved cigarettes may be more dangerous than black market cigarettes.
It turns out that workforce participation drops off significantly once it becomes possible to live off a government pension instead. Thus, pension policies have placed an enormous burden on those who still have to work.
While government spending re-allocates and distorts resources, it is not necessarily inflationary. Inflation really just stems from money creation and fractional-reserve lending carryied out by central banks and private banks — thus creating money "out of thin air."