Poor health habits (drinking, smoking, lack of exercise) take their toll on individuals and their families. The cost to society is less obvious but more far-reaching. This investigation quantifies the financial burden these detrimental health habits place on Amerian taxpayers. The authors measure the direct costs of poor health habits (fire damage, motor vehicle accidents, legal fees), as well as collectively financed costs medical care, employee sick leave, group health and life insurance), nursing home care, retirement pensions, liability insurance). Consider two co-workers covered by their employer's health plan: both pay the same premium, yet if one drinks heavily, the other - through their mutual insurance program - involuntarily funds the resulting health problems. After laying out their conceptual framework, analytical approach, and statistical methods, the authors describe how and to what extent drinking, smoking, and lack of exercise are currently subsidized, and make recommendations for reducing or reallocating the financial burden. They present, for example, a clear case for raising excise taxes on alcohol. The authors correlate their data to make costs comparable, to avoid double counting, and to determine the exact costs of each of these poor health habits. This study should be of interest to public health policy specialists and researchers, as well as to health economists.