Addicted to taxes: The only tax it might be popular to raise is the one on cigarettes.

AuthorRobbins, Leslie Teach
PositionStatistical Data Included

There's hardly a legislator today who doesn't remember George H.W. Bush's infamous "read my lips" quote. Lawmakers in every state have had "no new taxes" on their lips for the past decade and are determined to respect that pledge.

But times are tough. States dealt with a $37 billion deficit this past year. Legislators tapped rainy day funds, laid off state employees, delayed capital projects and boosted fees. Only four states raised the sales tax. Only Nebraska raised it's income tax. In many states, it wasn't even whispered.

But lawmakers in 32 states have been willing to consider raising cigarette taxes as a means of generating needed revenue, nearly double the bills introduced last session. Even tobacco-growing states like Kentucky, South Carolina and Tennessee looked at the proposal this session. And while tobacco taxes amount to only a small part (1.5 percent to 2 percent) of a state's total taxes, 18 states and Puerto Rico raised them, adding as much as 70 cents to a pack of cigarettes. Seven of those 18 states will use all or part of the money for health projects.

And there could be more. Oregon has a special ballot initiative to be voted on this month. Missouri and Arizona have initiatives to raise tobacco taxes for health projects on the November ballot.

NOT JUST A REVENUE RAISER

Numerous studies, including one in 2000 from the U.S. surgeon general, have found that cigarette consumption goes down when prices go up. Adolescents and young adults are more responsive than adults to cigarette price changes. Cigarette use dropped by almost 19 percent after California passed a 50-cent increase in excise taxes in 1999. Sales went down 20 percent after New York passed a 55-cent excise tax increase in 2000.

In Rhode Island, cigarette tax supporters have used the reduced consumption argument to pass their legislation. Senator Tom Izzo believes that raising the tax on cigarettes unquestionably makes people smoke less. "If we can affect consumption, it means we stand a good chance of improving the long-term health of folks." However, public health advocates are pushing for more than just increasing the cigarette excise tax.

Ideally, they would like to see that money earmarked for health programs, specifically for smoking cessation and tobacco use prevention programs. "Generally, folks will tolerate an increase in a tobacco tax if those dollars are being directed to health programs," Izzo notes.

NOT A PERFECT TAX

Although tobacco taxes have been...

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