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Maryland cigarette tax increase of 50% proposed, following alcohol tax hike

National Bohemiam beer mug Just a couple of months ago, an alcohol tax hike pushed up the price of Maryland's Natty Boh. And now a move is underway to make the smokes you light up as you enjoy your beer more costly, too.

These two sin taxes, the name given to levies on what are usually unpopular or unhealthy habits, are the latest ways Maryland is looking at to boost its bottom line.

On July 1, the Old Line State's tax on beer, wine and liquor increased by 50 percent, from 6 percent to 9 percent.

The higher booze tax is expected to bring in $85 million in its first year of collection. The money is targeted for school construction and programs for the developmentally disabled.

Cigarette butt smashed Now a public health group is seeking a 50 percent increase of Maryland's tobacco tax, raising it from $2 per pack of cigarettes to $3 per pack.

The Maryland Citizens' Health Initiative also plans to lobby for higher taxes on other tobacco products, such as cigars and smokeless tobacco.

The current state excise tax on these other tobacco products is 15 percent, but the anti-smoking group has not announced a specific rate or increase amount it would like to see enacted.

The silliness of sin taxes: What would governments do without sin taxes?

The offending habits or products these taxes are designed to correct are easy targets. And lawmakers always try to make it seem like the tax is noble and worthwhile.

Yep, sin taxes are a great way to shape social policy and make people shape up, right?

Wrong. Sin taxes are lazy tax policy.

That's why we have so many states with anti-smoking and anti-drinking tax laws, Uncle Sam's tanning tax and Denmark's fat tax.

Pick your perceived sin and have at legislating it out of existence.

Good luck with that.

Lawmakers should quit falling back on these easy tax laws. At the very least, they should be honest about why a sin tax is being enacted, as I note over at my other tax blog:

"The people wagging their fingers and nagging are happy because the folks with bad habits are being punished by higher taxes. Lawmakers are happy because they get to approve a tax that won't cost them their jobs. And state treasurers are happy because they keep getting money.

Now if we could only figure out a way to tax self-righteousness, every government would be rolling in dough."

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John Sheldon

I Love your articles guys keep it up.

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