Tax Hikes Proposed on All Tobacco Products as States Seek to Close Loopholes, Thwart Industry
Push toward higher taxes on cigars, smokeless, loose tobacco
Posted by: Editor | Jan 30, 2012
States around the country are getting wise to the tobacco industry's promotion of products such as sweet-flavored cigars and smokeless tobacco as a way to hook kids and offset the decline in cigarette smoking: Increasingly, governors and lawmakers are proposing higher taxes on "other tobacco products" that too often have been left out when cigarette taxes are hiked.
Raising tobacco taxes remains the best way to keep kids from using tobacco, help current users quit and raise much-needed revenues for cash-starved state budgets. But leaving out smokeless tobacco, cigars and other tobacco products when cigarette taxes have been hiked has created a price gap that keeps other tobacco products relatively inexpensive — and more affordable to kids. The tobacco industry has exploited this loophole as it steps up its marketing of smokeless tobacco and pushes "little cigars" — some of them flavored like candy and fruit to appeal to kids.
Fortunately, state officials around the country are moving to close the tobacco tax gap:
In Massachusetts, Gov. Deval Patrick has delivered a one-two punch by proposing to raise the state's cigarette tax by 50 cents per pack, and to tax other tobacco products at the same rate as cigarettes. According to the Governor, these tobacco tax hikes would raise $72.9 million, with revenues used in part to expand the state's successful programs to help smokers quit.
In Maryland, Gov. Martin O'Malley has proposed raising the tax on other tobacco products to 70 percent of their wholesale price, up from the current 15 percent. The hike is estimated to generate as much as $30 million in annual revenue.
Health advocates in Ohio — which ranks dead last in the nation in spending on programs proven to protect kids from tobacco — are urging lawmakers to tax all tobacco products at the same rate as cigarettes and use the funds for smoking prevention programs.
New York Gov. Andrew Cuomo has proposed upping the tax on loose, or "roll-your-own," tobacco, and other states are looking to take similar action.
"Raising the price of tobacco has proven to be an effective way to steer people" from a deadly addiction, the Baltimore Sun writes. "And discouraging everyone from using tobacco in any form is always a good idea."