Proposals on how to replace lost State tax revenue?

[dubd1c3]

By the time all smokers in my State Michigan are finished smoking 1 PACK of cigarettes, Michigan just made $3.1 million. ON ONE PACK.

If I were on the budget committee, I would be like hey, these e-cigs are well and good but if our tax revenue cuts in half in ten years, we need to figure out how to replace that lost revenue.

Does anyone have any solid theories? This is what I've come up with so far-

A) ANNUALLY FLUX THE TAX RATE ON CIGARETTES TO MATCH STATE REVENUE.

For example, let's suppose Michigan makes $100 million dollars in cig tax in 2010, but only $90 Million dollars in 2011. Cig tax goes up 10% for 2012. 2012 makes $110 million. Cig tax come down %10. LOCK IN a set yearly income from tobacco.

Maybe this is unconstitutional or illegal though. I don't know, I'm not a political scientist.

B) TAX E-CIGARETTES.

This would deter incentive from using them, but the State wouldn't lose and it would be able to openly support e-cigs.

Oh, by the way, MI cigarette tax is $2.00/pk.
IOW, $2.00/180mg (90mg per dollar) nicotine.
9mg/cig x 20 cigs = 180mg.
15ml bottle of 16mg e-liquid = 240mg = $2.67 tax added
30ml bottle of 36mg e-liquid = 1080mg = $12 tax added

Here's the problem. Vapers on average consume waaay less nicotine. I went from 5 packs/month (900mg) to 2 bottles/month (320mg). So the State still loses a decent amount of money through this method.

C) INCREASE REVENUE/TAXATION IN ANOTHER AREA

Traffic Violations, Alcohol...



If you smoke a pack a day Michigan gets $730 from you every year.

 

[BradSmith]

I don't think Michigan needs any new taxes, they should cut spending. There is so much pork to still be cut, it's a joke that they have a hard time with the budget. Walk into any of the state office buildings and you will see a handfull of people actually hustling about getting things done. The rest of the people many of them fairly higher up on the latter, walk around drinking coffee and refusing to answer their phones for fear of actually having to do something.

 

[dubd1c3]

I mean yes, true, but

A) I'm asking the question from a national point of view, I was just using MI stats because I live in MI.

B) Asking a State to accept e-cigs, lose itself money, and compensating by spending less just seems unlikely to win them over.

Nevertheless, I will add it as a proposal.

 

[chrisl317]

I'm with Brad. I also live in Aunt Jenny's Dream World. Tell the state to do without, period! That's what we've been told for the longest time, what's good for the goose, is good for the gander. Cut state spending, freeze state congressional leaders pay until the state comes out of recession, companies that have gotten tax abatements that have shifted jobs overseas should have that abatement forfeited and should pay back the abatement. Put Kwame, Bob and Martha on the road patrol picking up trash. Make Engler give back the car he never used. Bring back STRESS in Detroit. Stop the Mackinac business/governor party until everyone's employed again. And the list goes on and on.

 

[D103]

Herein lies the problem!! Every state in the union has arguably become "more dependent"
on tobacco tax revenues than the smokers are dependent on nicotine. I strongly disagree with dubd1c3's first proposal of "dumping even further" on smokers to make up for tax revenue shortfalls - this makes us no better than the ***holes who've been extorting most of us for years - just because I no longer smoke cigarettes, I refuse to turn my back on smokers and go along with any proposals that involve further tyranny and abuse on a minority group. Off-setting tax revenue declines by increasing taxes on other products is also patently unfair (robbing Peter to pay Paul) the only real, rational solution is establishing true, fiscal responsibility - reducing pork-barrel, out of control spending and governmental waste and entitlements, true tax reform, etc. However, the likelihood of any of this happening is nil, it is just too easy to continue to tax the s**t out of smokers and talk out of both sides of their mouths, say they want smokers to quit, but in reality know and secretly like, that most smokers will not - so the sin tax money flows.

 

[dubd1c3]

Yes, this is the widely known problem.

And I didn't say that I supported any of the ideas I proposed, I'm just trying to come up with all possible ideas and discuss them, which you did discuss.

Contrary to appearance, I don't really want to turn this thread into a "the gov't should spend less money" thread. Yes. The government should spend less money.

Anti-smoking ppl say the best solution for smoking is abstinence and quitting etc. That solution just didn't vibe for us, that's why we vape. I'm trying to get creative in replacing lost sin tax revenues because governments, quite simply, don't WANT to just let the money go.

WHAT IS THE BEST SCENARIO in which the government (State or national) will say "yeah, ok, e-cigs, let's do this"??

This is why I did not ask "What is the best way to deal with lost tax revenue"

I asked "How can the loss of tax revenue be mitigated in a way that is both fair to goverment programs and taxpayers"

 

[PhiHalcyon]

The illegal 'drug/device' e-cigs will be removed from the market, and the fully taxed 'tobacco product' e-cigs will take their place. Problem solved.

 

[D103]

Mr. PhiHalcyon what do you think the fully taxed 'tobacco-product' e-cig will look like? i.e. -disposable-only, re-chargeables?, cartomizers only? nicotine level limits?, flavor restrictions? etc.

 

[chrisl317]

Let's just stop for a moment and listen to how this sounds.
I use product "A" to save money and for my health. Senator, I love this product so much, I want you to tax me for it so you can use more of my hard earned money on pork barrel projects for you and your crony's.

Is that about right?

 

[D103]

Sorry Dub I got off into a rant about the taxes. I just cannot think of a sensible and fair replacement for the huge amounts of money that tobacco taxes rake in each year for every State. If e-cigs are eventually allowed and continue to rise in popularity this issue is really going to rear its head in every State.

 

[dubd1c3]

Sall good, I know it can be frustrating BELIEVE ME.

Approach it from this perspective. If we were to write our district reps to embrace e-cigs and they agreed, then they go to "lawmaker meeting" or whatever and they say,

"Listen up, smoking-related death is a big problem and arguably a burden to our health care institutions! But these e-cigs are largely accepted by smokers, we should sanction this!"

And then all the other representatives are all like, "yeah, but dude, if all these people stop smoking and vape instead we're gonna lose all this revenue, and we're already in $X,XXX,XXX,XXX debt. How are we going to recover from that?"

"UUUHHHHHHHH"

 

[PhiHalcyon]

Mr. PhiHalcyon what do you think the fully taxed 'tobacco-product' e-cig will look like? i.e. -disposable-only, re-chargeables?, cartomizers only? nicotine level limits?, flavor restrictions? etc.

Flavor restrictions will depend on what class of tobacco products they are designed to fall under. If they fall under cigarettes, then the same flavor restrictions that are now in place for cigarettes will apply.

The other questions are more difficult to forecast with certainty, but here's a recent R.J. Reynolds patent: United States Patent: 7726320

Even though it will be interesting to see what BT comes up with, I have my eyes set on DIY solutions that do not involve the current e-cig design, nor the breaking of any laws.

 

[chrisl317]

You know tax talk like this should be considered just as bad as drug talk here on the forum. Why would you want to give anyone who lurks here who could possible be in a position to suggest this to a state legislator this idea about taxing PV's in our state? I don't want to pay anymore than I am already and they don't need any current or potentially new reason to take more of my or your money. How about laying more of a tax on those million $ boats up at Mac and Ray's, or the 6 grand a month apartments there? How about closing loopholes in the tax laws?

 

[D103]

Flavor restrictions will depend on what class of tobacco products they are designed to fall under. If they fall under cigarettes, then the same flavor restrictions that are now in place for cigarettes will apply.

The other questions are more difficult to forecast with certainty, but here's a recent R.J. Reynolds patent: United States Patent: 7726320

Even though it will be interesting to see what BT comes up with, I have my eyes set on DIY solutions that do not involve the current e-cig design, nor the breaking of any laws.

Which DIY solutions are those? I ask because I've thought about it and I cannot see how, if they end up allowing the e-cig as it is, they will be able to restrict any adulteration of the cartomizers - given the way the technology works what is to prevent a consumer from "dripping/re-filling" the cartos? I've thought that they will most likely attempt to control/prohibit access to any nicotine-juice.

 

[D103]

You know tax talk like this should be considered just as bad as drug talk here on the forum. Why would you want to give anyone who lurks here who could possible be in a position to suggest this to a state legislator this idea about taxing PV's in our state? I don't want to pay anymore than I am already and they don't need any current or potentially new reason to take more of my or your money. How about laying more of a tax on those million $ boats up at Mac and Ray's, or the 6 grand a month apartments there? How about closing loopholes in the tax laws?

I understand your frustration and I am equally angry about tobacco taxation excesses....but believe this, there is nothing that any of us can possibly come up with in terms of possible taxation scenarios that those in positions of imposing taxes have not already thought of ....and then some!

 

[Lightgeoduck]

You know tax talk like this should be considered just as bad as drug talk here on the forum. Why would you want to give anyone who lurks here who could possible be in a position to suggest this to a state legislator this idea about taxing PV's in our state? I don't want to pay anymore than I am already and they don't need any current or potentially new reason to take more of my or your money. How about laying more of a tax on those million $ boats up at Mac and Ray's, or the 6 grand a month apartments there? How about closing loopholes in the tax laws?

Yeah.. because they Really need the help of lurkers to give them ideas about senseless taxation of products..

 

[chrisl317]

Yeah.. because they Really need the help of lurkers to give them ideas about senseless taxation of products..

And there's no reason to slit our own throats on the issue either, is there?

 

[the86d]

What is next, a cola tax? Coffee tax? It already has standard sales tax... if they wanted sins to be taxed they should have not taxed them through the roof, and more people would be using them... they taxed these until people that are addicted, and go broke! This is the major reason why I switched... if this goes up and taxed more than standard sales tax, then I for one will be finding what I need out of the public eye, and in dark and cheap places... and making my D'86'kang juice...

 

[potholerepairman]

Can't stand the smokers that litter myself and it has nothing to do with the smell.my guess is 95% of all smokers throw butts out the window of their cars(florida) so tax smokes 50 dollars a pack and get the litter bugs controlled .My main reason for not wanting other things legal is the litter on the roads.

 

[dubd1c3]

My buddy got a $500 littering ticket after throwing a cig out of his car just this last month...