UPDATE – Effective July 1, 2010 the Utah tax rate became $1.70/pack. There is an inventory tax equal to the difference between the old tax rates and the new. The owner of Lotty’s in Evanston said, “They’ll get in their car and come up for the weekend and stock up on porn and beer and cigarettes.” A spokesman for the Tobacco Prevention and Control Program said, “They don’t understand the psychology of a smoker. Smokers don’t travel to buy their cigarettes. They go to the corner market. It’s probably habit more than anything.”
A Utah legislative house committee has proposed H.B. 196 to raise the Utah cigarette tax from 69.5 cents to $1.70 a pack. This will raise $22,500,000 in fiscal year 2011 and by $23,000,000 in 2012. The fiscal year begins July 1st.
Reasons Against Raising The Cigarette Tax
1. Smokers are not likely to quit because of a tax increase.
This argument misses the point. Whether or not it is stated, the primary objective of the cigarette tax is to raise revenue, which it will.
2. Smokers will purchase tobacco products in neighboring states or online.
This is worth considering. A round trip from Salt Lake City to Evanston is 167 miles. The cost of driving is an average of 54 cents a mile. Hence the transportation cost of a bootlegging expedition would look something like this:
167 miles X .54 dollars = $90.18
The proposed $1.10 tax difference ($1.70 Utah tax – $0.60 Wyoming tax) is not looking so bad after all.
So what about buying over the Internet, the great equalizer? I might ask why haven’t Utah smokers embraced Internet buying to avoid the current 69.5 cents tax? Could it be because of:
- State age verification laws
- The federal Jenkins Act, which requires that such sales be reported to state authorities
- State laws prohibiting or regulating the direct shipment of cigarettes to consumers
- State and federal tax laws
- Federal mail and wire fraud statutes
- The federal RICO law. Many of the sales made by foreign websites also violate federal smuggling, cigarette labeling, money laundering and contraband product laws.
3. Smoking is legal so should not be targeted.
Cars are legal too yet they are taxed heavily. Yet non-car owners reap a subsidy every time they ride public transportation. Why is this so? Because it is perceived that less cars on the road = good. Similarly less smokers = good. Get it? Good.
Reasons For Raising The Cigarette Tax
1. It will help offset the cost of illnesses and diseases related to smoking.
Indeed it will. Costs paid by government to treat lung cancer, emphysema, bronchitis, and heart disease are borne by all. Hence taxes collected from smokers will offset these expenses either directly or indirectly. The adverse health effects from cigarette smoking account for an estimated 443,000 deaths, or nearly 1 of every 5 deaths, each year in the United States.
2. The tax is higher in many other states.
It is. As mentioned, the Utah cigarette tax rate is 69.5 cents a pack, ranked at 36th in the U.S. If the tax is raised to $1.70, Utah will tie with Montana for 17th place.
Around the country we find that first place goes to Rhode Island at $3.46 followed by Connecticut at $3.00 and New York at $2.75.
49th place goes to Virginia at 30 cents followed by Missouri at 17 cents and South Carolina at 7 cents.
The average is $1.34 a pack. These rates do not include local cigarette taxes, sales taxes, or the federal $1.01 tax. For example, New York City has a $1.50 per pack tax in addition to the New York State tax of $2.75. The 8.875% New York City sales tax is also applied to the state cigarette tax.
The six states bordering Utah have these rates per pack:
- Arizona — $2.00
- Colorado — 84 cents
- Idaho — 57 cents
- Neveda — 80 cents
- New Mexico — 91 cents
- Wyoming — 60 cents
As you can see, only Idaho and Wyoming have lower rates — and not by much.
3. Increasing the cost helps deter youth smoking.
Tax policy is used in multiple areas to encourage and discourage “good” and “bad” behavior. Consider the mortgage interest deduction, child tax credit, and the alternative fuels credit. Smoking is considered “bad” hence it is taxed heavily. Even some things that are “good”, like my income, are taxed heavily. However I do not believe that the cost of cigarettes is a deterrent to youth smoking but increased taxes could be used in anti-smoking campaigns.
You can probably come up with more reasons for or against a cigarette tax increase.
Summary
This appears to me to be a good bill. If it were me I would raise the tax by 50.5 cents the first year and 50 cents the second year. I wouldn’t pretend the tax was anything other than a revenue raising device. If smokers quit it will save the state from expensive health costs. If not, then additional monies are contributed to said health expenses.
I do not believe many smokers will go elsewhere to feed their habit. However, time will tell on this.
As a non-smoker I have published here what I have casually researched. If any readers have additionally information or experiences, please share.
Tobacco Tax Source: Campaign for Tobacco Free-Kids. Also there may be a benefit to a tax increase for your state.
my comment about the cigret tax hike is i belive this has gone way too dam far why tax us smokers couse you stupid people that do make the tax decisions allready raised the the tax on us utah,n last year so why another tax hike ? its not going to solve anything .crime will go up ,as well as other isues .just whithin the past four years you stupid idits raised our cigret taxes close too about $4 . and now another cigret tax hike this has gone way to far .just you guys doing this your realy takeing money away from people that cant afford it . cant you people chose something else to throw taxes on such as productes such as cloths,buiding supppiles ,events,roads ,anything else ecepet more taxes on cigrets.and i dont belive taxing us more on cigrets is going too solve anything wth helthcare etc .if a persons chose,s too smoke than so be it . and another thing is why are we paying more than idho is on our cigret tax .each and every state ought too be paying the same not more equeal so there for please re-think this and dont tax cigret smokers agin this year couse you guys just did last year and then a few years before that too . enough is enough on taxing us smokers . if anything else chose to dicress the tax too what idho is paying or even chose too dicress it by $2 but enough is enough . how about most of us cigret smokers go into one of the senter,s offices and protest up a big storm wich we already are doing by leaving you guys this msg .
It looks like the governor will veto any cigarette tax hike according to statements he made this week.
the tax on cigs is a dumb idea as if u figure it out the avg. smokers pays a dollar per day for every man women & child in the USA right now.so if the PC people get there way & people quite then where are they going to get the money that smokers r paying now. the govt is not going to say oh good everybody who smoked ie either dead or quit they will look to replace that money they just lost asap so be careful whaT U PEOPLE WISH 4 as the govt appitate for your money will not.I smoke & I agree its a nasty habit & do not want more people to smoke but the cost of the very fat people in the USA is why past any smoking problum as it passed up smoking health issues a couple of years ago but thats not PC.now I do not mean the people that r a few pounds over weight I am talking about 100+ over what u should weight.the national health agency stats cliamed that the USA is one of the fattest on the planet yet no one wants to bring up all the health issues that this has.
Mr. Herbert Businger, are you the one married to Merlina Businger ? If so, can you tell me your current address and phone number please.
and another thing it dosent realy deter youth from smokeing it realy dosent nor if someone that has been somkeing for years and years if they chose too smoke than so be it . its not realy going too change anything about their health couse they probly already have cancer or already have had health problem . but raiseing the tax agin on cigrets since you guys already did last year. then agin this year hell no chose something else too tax not gigrets agin . dont chose too pass the tax bill , just say do away with the tax agin on cigrets agin this year and drop it. plz dont tax us cigret smokers than we arealdy have.
one big thing that would bring revenue into the state is a toll fee on a lot of the mabor roads out there so think about a toll fee instead of a cigret tax hike . i mean this would bring big revenue into the state if there were a toll fee on some of the magor roads out there plus theres a few more jobs then not only that it brings funding in for the state .then the state has something to go on intsead of taxes ,taxes taxes .then the state would have something too fall back on if ever in need .
why ,why ,why,why ,why . its not going too make someone quit raiseing tax`on cigrets if they want too quit its there choice but alot of us smokers are saying enough is enough on taxing us somkers .
im saying i apose too this tax hike on smokers . if wanting too educate teens about cigrets educate them in school . but why should the smokers have too be penlized couse of this we shouldnt and us smokers now the way the econemny is now us smokers can hardly afford cigrets as it is now days couse us utah,smokers are paying more than any other state if any thing decress the tax and start listineing too us citizens about no more tax hikes on us smokers as it is . enough is enough on taxing us smokers it gone way too dam far decrese the tax not raise it . its not going to bring in tax money the state will only lose realy it wont bring extra money in .plus finde some other way to give education money taxing smokers isint going to make education or healthcare money they only lose money . no more tax hikes on us smokers enough is enough.
no no its a stupid bad bill . its not going to save the state money on heathcare nor will it bring in money for education for teens nor revenue for the state . enough is enough on taxing smokers . do away with the bill.
no it wont and us smokers this time are going to rally at the state captil and make our voices be heard about enough is enough we will make our word get through stop taxing smokers.enough is enough . stop taxing smokers .
like i said once before us smokers here in utah apose you guys going forward with this bill .we apose .no more tax hikes on smokers.
it wont raise revnue taxing us smokers . you lose reavnue not gain. enough is enough on targeting us smokers.we apose you assholes doing this. good bye.
Mr. Herbert Businger, are you the one married to Merlina Alvarez Businger ? If so, please comment back your current address and telephone number. You can email me at sivelry_2005@yahoo.com. Thank you.
These kinds of things always really make me mad. Cigarette smokers are just easy targets because they can claim they are somehow “helping them”. They would put a tax hike on toilet paper if the could justify it.
High tax cant stop smoking because addiction is addiction………….
The tax has done its job in raising money. Smokers are an easy target because they are in the minority. Millions of people have been able to quit smoking so for most people the addiction isn’t that great.
This is exactly the reason why I advocate electronic cigarettes. Less money and many lose the addiction to cigarettes too.
well now let me tell how this smoke thing really goes and where your taxes are going. This can be seen by any retarded criminal smoker! Smokes in utah as high as 67.00 carton vs idaho as low as 26.00 carton total savings 41.00. now price for two at lava hotsprings 12.00 gas even at 4.00 a gallon costs20.00 total t is 32.00 and I would still have 9.00 left so i can buy 1 pack when i get home but the trip was on utah tax dollars and now the smoker is a criminal this i a crock of crap get a life utah and i am sure many thank u for the trip they would not get if they bought smokes in utah . you idiots
The cost of gasoline is not your only expense. Wear and tear on your car should be added. Also whatever your time is worth. People who do not have the discipline to quit smoking are unlikely to be organized sufficiently to get around the tax.
That is why smokers are an easy target.