[h=3]Wisconsin smokers are quitting. The solution? Tax non-smokers.[/h]
In 1999, Wisconsin received $5.9 billion dollars in the national tobacco lawsuit and within 4 years it was all gone. That's because the state, facing the worst fiscal crisis in its history, had sold 25 years of tobacco payments for $1.3 billion to balance a single year's budget.
Since 2003, the percentage of adult smokers in Wisconsin has reduced from 22% to 20.6%. From 2005 to 2010, the net cigarette taxes collected more than doubled from $289 million to $595 million, while the total number of cigarette packs sold dropped from 414 million to 298 million. According to a 2011 report by the University of Wisconsin Comprehensive Cancer Control Program, no other source of state revenue has increased at that rate. "Revenue from tobacco (exclusive of revenue from tobacco bonds) is the fourth largest source of state revenue after sales, income and corporate taxes."
It is clear that to maintain the tax revenue, the state must either increase the taxes on the ever-dwindling population of smokers buying taxed cigarettes or find other sources of revenue. The 2011 UW report showed that taxes on non-cigarette tobacco products have increased by over 350% since 2005. Surveys show that smoke-free tobacco use has increased to 4% in Wisconsin. Clearly, many smokers have turned not only to the cheaper, Native American cigarette stores but also to less expensive, less harmful smoke-free tobacco products. Obviously, the state would want even more from those smoke-free users to compensate for the lost cigarette taxes.
Health organizations and legislators usually justify increasing tobacco taxes by claiming the increased costs reduce smoking rates, thereby improving public health and decreasing health insurance and medical care costs. But the UW report mentioned earlier found that while "increasing taxes may effectively reduce cigaretteconsumption, it did not cause a significant decline in adult smoking prevalence. The increase in taxes may have contributed to the modest decline in youth smoking, which is consistent with other studies showing that youth are more sensitive to price changes than adults." (Translation: Nearly the same percentage of people are still smoking, they just aren't smoking as many cigarettes as they did before and the decline in youth smoking hasn't exactly been exceptional, either.)
With that in mind, consider a new bill soon to be introduced by Wisconsin Representative Garey Bies (R-Sister Bay).
The bill, titled the "Backpack Tobacco Act," claims to only be thinking of "saving the children" when proposing to increase the taxes on non-cigarette tobacco products to be as high as current cigarette taxes. The health organizations supporting this Act claim it is to combat the increased use of "little cigars" and smoke-free tobacco products that come in "candy flavors." (Note that the only people calling these "candy" flavors and bringing them to the attention of youth are the health groups themselves.) They claim that increasing the tax on these products will have a significant impact on reducing youth smoking rates.
Let me first say that I strongly support prohibiting the sale of tobacco and nicotine products to minors. However, the proponents of the bill make several claims designed to convince and/or scare people into increasing taxes .(mainly affecting the adult consumers of these products) that just don't stand up to the light.
Some of the "facts" stated in a joint press release issued by the bill's author and the American Lung Association, American Heart Association, American Cancer Society, Campaign for Tobacco Free Kids and Health First Wisconsin were...
Read full story >
In 1999, Wisconsin received $5.9 billion dollars in the national tobacco lawsuit and within 4 years it was all gone. That's because the state, facing the worst fiscal crisis in its history, had sold 25 years of tobacco payments for $1.3 billion to balance a single year's budget.
Since 2003, the percentage of adult smokers in Wisconsin has reduced from 22% to 20.6%. From 2005 to 2010, the net cigarette taxes collected more than doubled from $289 million to $595 million, while the total number of cigarette packs sold dropped from 414 million to 298 million. According to a 2011 report by the University of Wisconsin Comprehensive Cancer Control Program, no other source of state revenue has increased at that rate. "Revenue from tobacco (exclusive of revenue from tobacco bonds) is the fourth largest source of state revenue after sales, income and corporate taxes."
It is clear that to maintain the tax revenue, the state must either increase the taxes on the ever-dwindling population of smokers buying taxed cigarettes or find other sources of revenue. The 2011 UW report showed that taxes on non-cigarette tobacco products have increased by over 350% since 2005. Surveys show that smoke-free tobacco use has increased to 4% in Wisconsin. Clearly, many smokers have turned not only to the cheaper, Native American cigarette stores but also to less expensive, less harmful smoke-free tobacco products. Obviously, the state would want even more from those smoke-free users to compensate for the lost cigarette taxes.
Health organizations and legislators usually justify increasing tobacco taxes by claiming the increased costs reduce smoking rates, thereby improving public health and decreasing health insurance and medical care costs. But the UW report mentioned earlier found that while "increasing taxes may effectively reduce cigaretteconsumption, it did not cause a significant decline in adult smoking prevalence. The increase in taxes may have contributed to the modest decline in youth smoking, which is consistent with other studies showing that youth are more sensitive to price changes than adults." (Translation: Nearly the same percentage of people are still smoking, they just aren't smoking as many cigarettes as they did before and the decline in youth smoking hasn't exactly been exceptional, either.)
With that in mind, consider a new bill soon to be introduced by Wisconsin Representative Garey Bies (R-Sister Bay).
The bill, titled the "Backpack Tobacco Act," claims to only be thinking of "saving the children" when proposing to increase the taxes on non-cigarette tobacco products to be as high as current cigarette taxes. The health organizations supporting this Act claim it is to combat the increased use of "little cigars" and smoke-free tobacco products that come in "candy flavors." (Note that the only people calling these "candy" flavors and bringing them to the attention of youth are the health groups themselves.) They claim that increasing the tax on these products will have a significant impact on reducing youth smoking rates.
Let me first say that I strongly support prohibiting the sale of tobacco and nicotine products to minors. However, the proponents of the bill make several claims designed to convince and/or scare people into increasing taxes .(mainly affecting the adult consumers of these products) that just don't stand up to the light.
Some of the "facts" stated in a joint press release issued by the bill's author and the American Lung Association, American Heart Association, American Cancer Society, Campaign for Tobacco Free Kids and Health First Wisconsin were...
Read full story >
