Tobacco Documents Online

Ap~ State Excise Tax Round-Uo The 1997 legislative season has opened with a spate of new proposals to increase cigarette excise taxes in several states, from Maine to Alaska. Although 26 different state excise tax increases were proposed last year, only two passed -- Oregon and Massachusetts. The Massachusetts tax increased by 25 cents, to 76 cents per pack last October, while Oregon's new tax ~% rate took effect this past February, nearly doubling from 38 to 68 cents per pack. The state of Washington also phased in a scheduled 1 cent per pack increase last year that was passed_ originally in 1993. Nineteen ninety-six, however, was an election year, when legislators are generally hesitant to support any new taxes. This year, all rE-election restraints are off. As the opening gavel is being heard in state houses across the country, measures to significantly increase the tax burden on smokers are springing up. As of mid-February, proposals had been introduced in states to increase cigarette excise taxes. While it remains to be seen how many of these proposals will actually be enacted, the fact remains that singling out smokers is an unfair and unwise way to govern. Here's why:

excise taxes is rarely as high as proponents of tax increases project it will be. •Excise taxes should be an option/6f last resort. Right now in the state of Minnesota, Gover for a ten-cent per pack cigaret multi-million dollar baseball s despite the fact that the stateJaui2'errt-Y~ a 1.4 bi11in surplus. Similar examples abound nationwide. have got to do a better job of managing existing tax dollars before asking taxpayers for additional funds. As legislatures nationwide settle down to work, it is critical that smokers be aware of efforts to raise their state's cigarette excise tax, and be ready to take action against any increase, when the time comes. Arne Carlson has called e tax increase to help fund a adium for the Minnesota w~ins

• Excise taxes hurt lower-income people the hardest. It's a fact. Cigarette excise taxes are regressive. That means that, as a percentage of income, they take more from a middle-class person's paycheck than they do from a wealthier individual. I•Excise taxes cost jobs. As excise taxes drive up the cost of consumer products, sales decrease. As sales decline, retailers have less of a need for clerks and cashiers. Other industries would also be at risk, including trucking, advertising and agriculture. How many jobs are at stake? Well, when Presidnet Clinton proposed increasing the federal cigarette tax by 75 cents per pack, in order to fund a new national health care program, Price Waterhouse accounting firm estimated that almost 275,000 jobs nationwide would be lost. •Excise taxes single out one group of consumers to pay for government services that are everyone's responsibility. Smokers pay ee~ $~t billion 'n federal, state-and local i t t hi h f d gare axes each year, w un government programs , c te c ki ~ enjoyed by smokers and non-smokers alike. G~ ,ti WV U~' •Cigarette excise taxes are an unreliable source of revenue. Excise tax revenues tends to fluctuate from year to year because they are tied to sales of the taxed product. Since higher taxes tend to'reduce sales, the revenue from cigarette N 0 V 0 W ~ ~ ca W 4