NH, RI, NJ Buck Trend, Propose Cigarette Tax Cut

If you ever needed proof that Republicans care more about business than people's lives, there is no starker evidence than this legislation. Sure, let's save people 10 cents a pack so that they can smoke even more. The financial rationalizations for this legislation can't hide the fact that the tobacco companies will sell more cigarettes to more people causing more health problems for an already over burdened health care system. Thank you GOP! Or should I say Tea Party? Getting hard to tell.


CONCORD, N.H. — Bucking a national trend of raising cigarette taxes, New Hampshire, New Jersey and Rhode Island have considered reducing theirs, hoping to draw smokers from other states and increase revenue.

Supporters argue reducing the tax by a dime would make New Hampshire more competitive with Maine, Vermont and Massachusetts, while opponents say that even if the state experienced higher sales as a result it still would lose millions of dollars in revenue.

It's very unusual for states to lower the tax, University of Illinois at Chicago economics professor Frank Chaloupka says. The increase in sales isn't enough to offset the drop in state tax revenue, he says.

Instead of lowering the tax, states have enacted 100 increases over the past decade, he says.

"New Hampshire has been going in the same direction as the rest of the country, basically forever," Chaloupka said.

New Hampshire raised its tax repeatedly since Democratic Gov. John Lynch took office in 2006, increasing it from 52 cents per pack in 2005 to $1.78 currently.

That changed Thursday, when the state House passed a bill that would cut the rate 10 cents to $1.68 per pack in hopes of attracting smokers from surrounding states with higher taxes. Rhode Island's bill would cut its tax by $1, to $2.46 per pack. New Jersey last year considered reducing its tax 30 cents, to $2.40 per pack, but hasn't followed through on it.

New Hampshire Senate Finance Chairman Chuck Morse says he believes the Senate will support the cut.

"I think it's a positive sign for business. I think it will provide revenue in the long run," said Morse, a Republican who lives in Salem.

If approved by the Senate, the cigarette tax cut bill would go to the governor, who doesn't support it. But the House and Senate, led by Republicans, could override a veto by the governor, saving cigarette smokers 10 cents a pack.

Smoker Aaron Evans stopped Thursday at a convenience store in Haverhill, Mass., for a sandwich and a pack of Marlboro cigarettes. The pack cost him $7.13. A couple of miles away, a bigger pack of the same smokes would cost him $5.99 at a market in New Hampshire, which already has significantly lower taxes than Massachusetts.

Evans, 25, welcomed any move to make smokes cheaper but said a dime a pack wouldn't make him change his buying habits.

"You gotta average it out," he said. "I could either drive all the way over to New Hampshire and waste the gas — it kind of evens it out."

New Hampshire has historically looked to export its tax burden — and any resulting health costs — to other states through taxes on products such as tobacco and alcohol it sells to its residents.

"That's always been the way we run our tax structure," said Mike Rollo, spokesman for the American Cancer Society in New Hampshire. "We've always tried to tax people from out of state."

Danny McGoldrick, research director for the Campaign for Tobacco-Free Kids, said other states aren't cutting their tax rates in these tough fiscal times because they need the money. Raising the tax, he said, produces revenue despite resulting in a desired decrease in the number of smokers.

"These smoking declines, of course, save lives and health care dollars as well," he said.

The New Hampshire Grocers Association has consistently criticized the tax increases as hurting small businesses, particularly along New Hampshire's state line.

Association President John Dumais said Thursday that cutting the rate a dime would cost the state tobacco tax revenues but would result in an offsetting increase in state taxes collected from people renting hotel rooms, eating in restaurants, buying alcoholic beverages, buying lottery tickets and buying gasoline. The net result would be no loss of revenue to the state but an incentive for tourists to visit the state to shop, he said.

"People coming from out of state are going to have an empty gas tank. They're going to be hungry. They're going to be tired," he said. "It's going to help every business."

State Rep. Patrick Abrami, R-Stratham, made that argument successfully during the House debate.

"We have reached the tipping point," he said. "We are hurting our merchants. We are losing sales on our borders."

But state Rep. Christine Hamm, a Hopkinton Democrat, called the move "fiscally stupid."

"No state has cut their tobacco tax and seen a revenue increase," she said.

The House voted 236-93 to send the bill to the Senate anyway.

Lynch spokesman Colin Manning, who said the governor doesn't support the tax cut, pointed out New Hampshire's tax rate already is the lowest in the region.

Massachusetts' tobacco tax rate is $2.51 per pack; Maine's is $2; Vermont's is $2.24; Connecticut's is $3; and Rhode Island's is $3.46. Unlike the other states, New Hampshire has no sales tax.

Manning said the House is considering making much deeper budget cuts than Lynch proposed "and now with this action today it raises the question of what else they are going to cut."

 

Now this is something different Over here there are propossals to ban tobacco from view in shops (you can still sell it but must hide it under the counter) also a plan to remove the distinctive packaging and make them all one bland colour in a attempt to lower the number of smokers (specialy amongst the young)
Now as a ex smoker myself I have to say simply hiding them away or selling them in uniform packets woudnt have made me stop LOL

 

Probably a little easier in your country since you do not grow tobacco in the UK. There is huge tobacco lobby here that the Right wing takes a lot of money from and does their bidding. You need no more proof of that fact than this legislation proposed by the Republicans.

 

Can you please explain how state politicians of states that don't produce tobacco are being influenced by federal lobbyists for the tobacco industry? This stupid move has nothing to do with corporate corruption of the political process and is simply a desperate attempt to increase revenues in states that are experiencing fiscal crisises as a direct result of irresponsible government spending by previous democratic administrations.

How long are you going to spin your ridiculous propaganda campaign?

 

C'mon the left takes money from the tobacco companies too. And do you really think that a 10 cent drop in cost is going to get more people to smoke? Or smoke more? I think cigarettes are nine dollars a pack in NYC. I doubt smokers would breathe a sigh of relief(if they can breathe at all)at paying 8.90.

 

If any of them were concerned about actual health, they would raise the tax to $20 a pack. All these maneuverings just seem more to me like trying to balance sin tax revenue vs taxes from sales/business revenue in order to increase overall state revenue.

 

How would a 20 dollar tax increase on cigs show a legislative's concern for ones health? It may cause some to quit, but not all. There are some real die hard smokers out there. And if it did make all of them quit; would you be prepared to pay $23 for a bottle of beer? I mean they'd have to increase a sin tax somewhere. Governing bodies need only claim they are doing it to prevent teenage drinking. And who wouldnt be all for that reason? Besides has anything ever been taxed out of existence?

 

Ok, $200,000 a pack.

Really, though, I don't remember saying I supported a higher or lower tax at all. My contention was I do not believe that lowering or raising the current taxes by a dime or whatever is about health or 'people's lives' as the OP suggested. It is about state revenues.

 

And, I would have used the term 'outlaw them' in place of a super high tax but I am actually not sure if states have the rights to do that.

 

What you don't get is that this is a gift to the tobacco companies. I haven't checked but if you were able to look up the people/person sponsoring this bill, my guess is that they received campaign contributions from some tobacco lobbyist. Maybe through the greater GOP coffers or maybe directly but I am positive that the money was given and this legislation is the result of that gift. There was quid pro quo somewhere in the process you can bet your bottom dollar. Since corporations are now people and money is now free speech and no disclosure was allowed by the GOP, good luck looking up that connection.

 

Oh, I am sure it is meant to help a corporation, and that it, like most laws these days, was bought by a corporation. I just dispute that the reasons either way have much of anything to do with people's lives and deaths.

 

Here's a fun fact just as an aside...the health cost of cigarettes is roughly $10.50 a pack per the CDC