General Feed
SC House Speaker Bobby Harrell (R-Charleston) has introduced a bill, HB 3584, that would increase the cigarette tax 714 percent to fund a $139 million low-income health care program.
Nevermind the fact that cigarette tax increases rarely meet their revenue projections. Or that they lead to a mass exodus of consumers across state lines or to the Internet. Or that cigarette taxes represent a regressive tax hike on the poor (who have already been subjected to a big tobacco tax at the federal level). If this bill passes, $139 million will be earmarked for a new spending program, only to see a shortfall when revenues fail to live up to expectations.
HB 3584 will be heard today in the House Ways and Means Subcommittee on Licenses, Fees, Insurance Tax and Other Charges. Lawmakers would be wise to reject the bill, which constitutes a massive increase in the burden on South Carolina taxpayers in the midst of a massive economic downturn.
714% Cigarette Tax Hike Up in South Carolina Today
Posted by Joshua Culling - March 24, 2009Thoughts? Add Comment -
Bryan said on Mar 24 2009 at 9:37am
South Carolina is currently dead last among the states in cigarette excise taxes, at $.07 per pack, so a 714% increase only raises the tax to $.57 per pack, only $.20 more than neighbors North Carolina and Georgia, and still well below the national median of $1.00 per pack.
Aside from that, there is the fact that an increase in cigarette taxes typically leads to a decrease in smoking, which improves our overall health. And, if the state really needs the $139 million, they have to start somewhere. Even if the tax hike doesn't make up the entire amount, it will take a nice bite out of it.
Jane Taxpayer said on Mar 24 2009 at 10:25am
"Aside from that, there is the fact that an increase in cigarette taxes typically leads to a decrease in smoking ..."
Which is exactly why relying on cigarette taxes to fund new (or existing) spending programs is poor policymaking. On the one hand, government relies on cigarette and other "sin" taxes for revenue, and on the other, it hopes the increase will discourage that behavior (and often funnels money into smoking-cessation programs).
Keith said on Mar 24 2009 at 11:42am
Thus if SC raises the cigarette tax and fewer people smoke, then there will be less revenue then projected. This will leave Jane and John Taxpayer to pay for the rest of the health care program.
Bryan said on Mar 24 2009 at 2:01pm
The cigarette tax poses the same risk that any consumption tax does - that consumers may cut back in spending to avoid the taxes.
It isn't poor policymaking to seek a double benefit from a policy. As maximizers, we should work to maximize the benefit from every policy. If SC's cigarette tax increase helps 10,000 people quit smoking, while generating $125 million for the state, then it is easy to argue that it is a good policy.
Like most supporters of the FairTax, I support voluntary consumption taxes, like the "'sin' taxes," over involuntary taxes, like income taxes. If smokers are willing to foot $125 million of the state's bill, that's $125 million that the rest of us won't have to pick up. Those that opt out not only save the money, they also help themselves live longer, healthier, lives.
Joshua Culling said on Mar 24 2009 at 4:33pm
The purpose of a cigarette tax is not to stop people from smoking. It is purely a revenue-raising move. Any lawmaker who tells you otherwise is lying.
It won't raise $125 million, either. Cigarette tax hikes almost never reach their revenue projections. In the case of New Jersey, the state actually lost money after hiking the tax.
And I'm sorry, but it's not the government's responsibility to "help" (read: force) anyone to live healthier lives. Adult smokers know very well what they're getting themselves into every time they light up.
Joshua Culling said on Mar 24 2009 at 4:35pm
Not to mention the fact that putting the burden of the growth of government on the backs of a small, unpopular minority is absolutely not good policy. It's very easy to increase government to an unsustainable size when those benefiting from that additional spending aren't paying for it.
Joannah said on Apr 01 2009 at 1:02am
I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.
Joannah
http://windscreensite.com