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I don't know who's argument you are rebutting, but you certainly didn't address my point that smoking has long-term, deleterious effects on one's health. Given that a corporation has to provide for its workers' health care, smoking certainly does have an effect on the company.
I can think of other reasons, as well. But I'll wait until you address that one.
According to the government, this is seen as a viable reason to control behavior. Witness, for example, motorcycle helmet and seatbelt laws.
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