Tobacco Tax Increases are Slowing Down
All tobacco representatives are currently paying attention on the recent largest anti-smoking election fight in California. The State voters will consider adding additional $1 to the state’s excise tax on tobacco products. That would raise the price of a package by around $1.87. California is not a single country looking for more money from smokers, for instance Illinois officials increased the state’s cigarette tax.
When in 2012, the mean state tobacco tax constituted $1.46 per package. That amount, according to the Tax Foundation, was a substantial growth from the average of $1.18 registered three years ago; the 2012 tax also was about 10 times higher than it was many years ago.
During the last decade, Tax Foundation findings demonstrate that about 47 states increased cigarette taxes for more than 100 times. However that tax trend seems to have slow down. Probably the response to why more and more cigarette tax increases are being stopped is a disagreement on where the new tax money should be directed.
Tobacco tax increases are generally justified as a method to pay for the health care cost. However at present, many are asking how governments in fact spend the cigarette tax money.
In fact, the chance for passage of the increased cigarette tax in California has dropped a bit. Recent polls found out that 2/3 of the voters spoke in favor of the increase on cigarette tax.
Some experts state that the billions cigarette industry has directed into its efforts to defeat the tax has probably lead to the narrowing of opinions regarding the tax. But there is also a worry that so much money will be directed to medical research instead of programs to eradicate smoking, mostly among teenagers. Joseph Henchman, the Tax Foundation’s representative for Legal & State Projects declared that too excessive cigarette taxes are a sign of poor tax policy.
“The given tax policies, are complicated because they twist economic decision-making, invite relations from other states, and finally affect economic activity and trade. Additionally, profit that relies on consumer trends as cigarette use is unstable. Too raised reliance on such taxes, can cause budget difficulties down the line,” said Henchman.