Tobacco.org

Recession ushers in more tobacco taxes 

Clipping away at a $590 million deficit, Rhode Island this April raised its taxes on cigarettes by $1 to $3.46 a pack - the highest rate in the country. With the backing of its governor, a former tobacco lobbyist, Mississippi in May imposed its first tax hike on smokers in more than two decades - up 50 cents to 68 cents a pack - and is already considering another increase. . . .

"You have to go back decades to see states with such budget shortfalls," said Sujit CanagaRetna, a state budget and tax expert at the Council of State Governments. "A sin tax is a low-hanging fruit. Politicians are more prone to go down that path because doing so is just not as onerous."

Other experts, however, regard these short-term budget patches as part of a larger problem. One leading anti-tax activist, Grover Norquist of Americans for Tax Reform, said a better solution to burgeoning budget gaps is to cut state spending.

"Any problem of overspending that could be passed on to cigarettes could be fixed by just spending more wisely," Norquist said. "The problem with the tax increase isn't just that it's a tax increase, … it is that the tax is what you did instead of reforming state government."

Jump to full article »