Tuesday, March 25, 2008

Tax 'Em If You Got 'Em, Boys


Today's Greenville News has an op-ed piece about the effort to raise the cigarette tax in South Carolina, penned by Don Weaver, President of the South Carolina Association of Taxpayers. Mr. Weaver maintains that raising the cigarette tax and using the money for health care is a "welfare plan" and that it violates politicians "no new taxes" pledge. He's right. It is for welfare--the "general welfare"--or the greater good of society. And it is a new tax.


But politicians are not elected to grandstand on obscure anti-tax, libertarian schemes. They are elected to serve the greater good of their constituents. So here's why they should raise the tax anyway:


Raising South Carolina’s cigarette tax rate would quickly produce massive economic and public health benefits.


Increasing South Carolina’s cigarette tax to just the Southeastern average ($.46 per pack) would produce enormous benefits to the state and its residents, including:



  • Producing at least $100 million in additional new annual state revenue

  • Preventing more than 60,000 kids from growing up to become addicted adult smokers

  • Prompting more than 31,000 current adult smokers to quit for good

  • Saving more than 27,000 South Carolina citizens from dying prematurely from smoking

  • Improving worker productivity throughout the state

  • Reducing smoking-caused state Medicaid program costs by more than $125 million

  • Cutting total future smoking-caused health costs by more than $1 billion

South Carolina has the lowest cigarette tax rate in the country.


South Carolina’s cigarette tax of only seven cents per pack is considerably lower than the growing average state rate of $1.02 per pack. Twenty-two states now have cigarette tax rates of $1.00 or higher, with the current highest state rate in New Jersey at $2.57.5 per pack. Various cities and counties have even higher combined state-local cigarette tax rates, such as $3.00 per pack in New York City and $3.66 per pack in Chicago. The other tobacco-producing states also have substantially higher cigarette tax rates than South Carolina, with neighboring North Carolina at 35 cents per pack and the top state-local rates in Virginia going as high as 95 cents per pack.



The U.S. Centers for Disease Control estimates that South Carolina’s cost in medical care and lost productivity per pack of cigarettes total more than $7.66, which means we are losing nearly $7 on every pack of cigarettes sold in our state.



The toll of tobacco use in South Carolina remains quite high, with 5,900 adults dying each year from their own smoking, 6,500 more children becoming addicted daily smokers each year, and total smoking-caused health costs in the state totaling more than $1.09 billion.


Lower-income households will benefit the most.


Because more lower-income than higher income smokers will quit in response to a substantial cigarette tax increase, both proportionately and in total numbers, lower-income families in South Carolina would be some of the largest beneficiaries of a tobacco tax increase. Indeed, low-income families currently suffer disproportionately from smoking and smoking-caused disease and costs, and a cigarette tax increase would directly and substantially reduce that burden.

Raising the state cigarette tax rate will fight crime.


By substantially raising its cigarette tax and establishing a tax stamp, South Carolina could also get out of the business of supplying criminal syndicates and terrorist organizations that raise illegal revenue through buying cigarettes in South Carolina to smuggle and sell in higher-tax states. On the other hand, by simply increasing its cigarette tax to the nationwide state average, South Carolina would not, itself, become a target for cigarette smuggling or contraband sales - and there are numerous simple steps the state could take to minimize any efforts by smokers to evade the higher rate through cross-border or Internet purchases.


So, rather than continuing this giant welfare program for the tobacco companies, South Carolina's lawmakers need to serve us--after all, we're their bosses. And their bosses say they want this done, by a whopping 70% majority.


Don Weaver's right: unfair taxes hurt everybody. And a 7 cent per pack cigarette tax is unfair to all of us.


So tax 'em if you got 'em boys.

4 comments:

The Blue South said...

You make a great point. In my opinion the cigarette tax ought to be indexed to the burden smoking puts on the healthcare system. It could be used as a sort of insurance model- smokers, and only smokers, would purchase the cigarettes at a cost that reflects the risk of smoking-related illness and the subsequent healthcare burden caused by those illnesses. The obvious problem would be to convince the legislature to use the tax money from cigarettes exclusively for healthcare costs (see e.g. the "education" lottery).

Anthony Palmer said...

Conservatives commonly criticize raising cigarette taxes because they say this revenue for health insurance, for example, is contingent on people smoking. That's a pretty stupid argument. What ever happened to taxing items and behaviors we want to reduce and lowering taxes on behaviors we want to promote?

Good post, Reverend!

Anthony Palmer said...

PS: I know you're a deacon, but I hope you don't mind the promotion!

Anonymous said...

Also, a heavy usage tax on cell phones should be put in play within this cigarette tax. Studies produced in Europe this week indicated cancer-causing effects of long-term use. This tax would help ensure even greater coin into the health coffers. Probably a 30% tax on the cell phone usage would be fair, like the cigarette tax rate.