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Excise
Taxes
National
What is Proper Tax Policy for Smokeless Tobacco Products?
While there exist a large literature and extensive policy
discussion on the issue of cigarette taxation, smokeless tobacco
has received comparatively little attention. In recent years,
controversy in many state legislatures has erupted over the
proper way of taxing smokeless tobacco. The Fiscal Fact clarifies
the rationale for excise taxation in general, and specifically
to explain the proper method of taxation of smokeless tobacco
products and how it compares to cigarette taxation. To access
the publication, click here.
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States
California:
Tobacco firms spend big to stop tax
Opponents of Proposition 86, the $2.60 cigarette
tax on the November ballot, are fighting the initiative with
the message that corporate interests stand to gain if the
measure passes. Led by R.J. Reynolds and Philip Morris, tobacco
companies have raised about $40 million for their campaign
against a tobacco tax that would be the highest in the nation
if it passes. Click here
to view the article.
Big Tobacco’s Showdown in the West
California’s Proposition 86 would impose the largest
one-time cigarette tax hike ever, adding $2.60 to an existing
87 cents excise tax, bringing the average price per pack to
$6.55. A loss on Prop 86 would add to a series of statehouse
setbacks for Big Tobacco. Of late, cigarette makers have won
some major legal battles, including drastically reducing the
Justice Dept.'s once-mammoth suit against the industry. But
tobacco companies may yet lose the war. Price increases are
a singularly effective smoking deterrent, especially among
the young. And since 2002, according to the Campaign for Tobacco-Free
Kids, 42 states have raised smoking taxes, as have Washington,
D.C., Puerto Rico, and Guam. For information, click here.
Hawaii:
Smokers, get set for higher prices
In late September, Hawaii will impose its first of six annual
increases of cigarette tax. The increase will raise the cost
of a pack between 20 and 50 cents. The increase is aimed at
curbing the increase in smoking among young people. The revenue
will be used for health related programs, with funds going
to the Hawaii Cancer Research Special Fund, the Trauma System
Special Fund, and others. To read more, click here.
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