Sin taxes have always been a popular way to raise money.
They tend to adversely affect a relatively small group, which makes the legislators enacting the taxes, and the majority of folks who don't have to pay them, more comfortable.
They are usually presented as "it's for everyone's good" campaigns. The catastrophic results of the sin are emphasized and at least part of the new tax money is targeted to programs tied to the specific bad habit.
That's the case with cigarettes. When tobacco taxes are hiked, the health dangers to both smokers and breathing bystanders are regularly cited. And the tax money typically goes to fund some sort of health-related program.
The Campaign for Tobacco-Free Kids sums up the approach:
Every state that has significantly increased its cigarette tax has enjoyed substantial increases in revenue, even while reducing smoking. Higher tobacco taxes also save money by reducing tobacco-related health care costs, including Medicaid expenses. States can realize even greater health benefits and cost savings by allocating some of the revenue to programs that prevent children from smoking and help smokers quit.
I'm a former smoker. I've had loved ones, including my smoking-to-the end dearly departed dad, die of cancer. I know taxes won't stop the hardcore nicotine addicts from inhaling.
But the price factor does seem to stop a few folks, especially young people who don't have a lot of cash and must decide how to parcel out their discretionary funds. If a few more cents makes them choose a downloadable tune instead of a pack of cancer sticks, good.
Beating the smoking tax: In the short term, though, a tobacco tax hike can cause state revenue problems. The National Conference of State Legislatures says that such tax increases can result in stockpiling of cigarettes prior to the implementation of the tax, producing a temporary drop in sales immediately following the tax increase.
And at least one New York woman has gone beyond simply stockpiling cartons.
In Audrey Silk's backyard, along with the rose bushes, geraniums and impatiens, are 100 tobacco plants in gardening buckets. She dries the leaves in her Brooklyn home's basement.
Once the process is complete, Silk rolls and enjoys her tax-free homegrown cigarettes.
New York has the highest cigarette tax in the United States. But there are no federal, state or city laws prohibiting New Yorkers from growing tobacco at home for personal consumption, notes the New York Times.
Wanna bet lots of smokers now are looking into their state and local laws?
Silk buys tobacco seeds online for about $2. She expects her 2009 and 2010 crops to produce a total of 45 cartons and estimates that she will have saved more than $5,000.
"It'll make the antismokers apoplectic," Silk told the Times. "They’re using the power of taxation to coerce behavior. That's not what taxation is supposed to be for."
Taxes or personal policy? Silk makes a good point. Tax policy is used at all levels to support some lifestyle choices and discourage others. The debate about whether that's the appropriate use of tax laws has been raging on since the first sin tax was created.
Even when I personally support a sin or other type of tax, I am disgusted by the self-righteousness of many pushing to not only collect revenue, but essentially punish via pocketbook the person who has the offending habit.
But despite the pompous rhetoric and personal predilections of politicians, in the end, it all comes down to how much money a government needs to operate and from which taxpayers the elected officials can most easily get the money.
By most easily, I mean not only the amount of money and the actual act of collecting the tax, but also which group of voters will be least likely to vote out the tax-enacting lawmakers.
It's that type of pulbic policy making that prompted Silk, a retired police officer, to found the smokers' rights group New York City CLASH (Citizens Lobbying Against Smoker Harassment).
Up in tax smoke: How big is your state's tobacco tax? Since 2002, 47 states, the District of Columbia and several U.S. territories have increased their cigarette tax rates more than 100 times.
But if you live in the South, you're probably not paying that much per pack.
Data from the Tobacco-Free Kids group shows that the overall U.S. tobacco tax average is $1.45 per pack. But the average tax in the country's major tobacco growing states is just 48.5 cents per pack.
Click the image for a larger view.
If you prefer text, The Campaign for Tobacco-Free Kids has the cigarette tax info in table format.
The cigarette tax rate map and table are likely to change as cash-strapped states look for ways to raise more money.
Right now, new California Gov. Jerry Brown is pushing his state's legislature to act by March 10 on a measure that would let voters in June decide whether to extend higher sales, income and vehicle tax rates.
The California proposal measure also would increase the Golden State's cigarette tax by $1 a pack. And yes, the money would go to cancer research and smoking prevention programs.
- Gas, sales and cigarette taxes are higher
- Colorado cigarette tax break in trouble
- The fine art of social policy taxation
- Bye-bye Bo-Tax; Hello Tan Tax
- State tax departments
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