Tobacco tax, decrease deficit

With Kansas potentially facing another budget deficit in 2010, Gov. Mark Parkinson has suggested a tobacco tax to generate new revenue. This could be an effective way to close the budget shortfall and encourage many Kansans to live healthier lives.

“Governor Parkinson has said that he supports a meaningful statewide smoking ban,” said Beth Martino, press secretary for Governor Parkinson. “He also has said that if we are facing a bleak budget picture, a cigarette tax is something for the state to carefully evaluate.”

Currently the tobacco tax in Kansas rests at 79 cents — well below the national average of $1.34. Kansas has the 35th lowest tax in the nation. The last time Kansas raised the tobacco tax was in 2002, when the tax increased from 24 cents to 79 cents. According to state budget reports, the tax added $81 million to state revenue.

Cigarette companies and other critics often say that tobacco taxes decrease state revenue by forcing too many smokers to quit. Though it’s true revenue from the 2002 tax hike has dropped by 26 percent during the last eight years, it is still bringing in double the revenue it did before the increase.

Every state that has increased tobacco taxes has seen an increase in revenue, according to the U.S. Alcohol and Tobacco Tax and Trade Bureau.

However, bringing in revenue would not be the only potential gain from a tobacco tax.

“If it gets too expensive I’d definitely have to quit,” Jacob Holliday, Lawrence freshman, said.

Internal documents from tobacco lawsuits posted on from multiple cigarette companies confirms the simple fact that higher tobacco taxes means fewer people smoking.

“A high cigarette price, more than any other cigarette attribute, has the most dramatic impact on the share of the quitting population.” Philip Morris executive Claude Schwab recorded in an internal business document.

A frequent criticism of tobacco taxes is that the taxes are regressive and hurt low-income smokers more, which is an argument that ignores the obvious.

“There is nothing more regressive than the economically disadvantaged having to bear all of the health problems caused by smoking,” said Mary Jayne Hellebust, executive director of Tobacco Free Kansas.

According to the Centers for Disease Control, low-income smokers are also more likely to quit than higher-income smokers when tobacco taxes are raised.

Critics also say a problem this tax might face comes from Missouri, which has the second lowest tobacco tax in the nation at only 17 cents a pack.

Though it’s true some smokers already cross the border for cheaper cigarettes and more almost certainly will if the tax is raised, it is still a fact that no state has ever seen revenue drop when increasing tobacco taxes, even when accounting for cross border smuggling.

Missouri’s tax may also be partly to blame for the state having the fourth highest percentage of smokers, which isn’t a model Kansas should be trying to follow.

Raising the tobacco tax in Kansas would be a win-win situation: a smaller deficit and healthier citizens. Students and the community should contact the governor’s office to show support for this new proposal.

By Clayton Ashley
October 8, 2009

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