Tobacco taxation

Joe Rutherford 5/7/09 for friday
Mike Tonos 5/7/09
Tobacco taxation
Add more Mississippi taxes
for ‘smokeless’ tobacco
Legislators, mostly unmotivated by the possibility of better public health but zapped into action by the prospect of voter-angering costlier car tags, passed a 50-cent-per-pack cigarette tax increase Wednesday.
The tax increase has been long sought by the medical community, public health advocates concerned about the disease and death rates linked to smoking, and by true fiscal conservatives concerned about the taxpayer-borne cost of treating indigents and Medicaid clients with tobacco-induced illnesses.
It raises the levy to 68 cents per pack. The tax will produce about $106 million per year for the state treasury.
The national state per-pack tax is $1.18. Some legislators sought to match the national average, but that idea didn’t gain traction.
The cigarette tax passed Wednesday does not increase taxes on what are sometimes called non-premium brands – cigarettes that usually are less expensive at retail and whose companies are not part of the tobacco lawsuit settlement Mississippi reached with major tobacco companies.
Gov. Haley Barbour would raise the non-premium brands’ tax to 43 cents.
Barbour wants an effective raise in taxes on smokeless tobacco (chewing tobacco and snuff) by changing the method to taxation by unit weight.
The additional revenue would not be huge compared to some streams, but it would be substantial, about $30 million.
Barbour said Wednesday he specifically recommends using the extra tobacco tax source to put $27 million into the fund that helps hold down car tag costs to county taxpayers. The car tag tax is a county property levy.
Declining auto and truck sales related to the international recession have ravaged the flow of sales tax funds historically used to offset car tag costs.
The 2010 and subsequent years’ budgets aside, the central issue is smoking prevention and cessation, leading to longer life, better health and greater productivity in the working population.
The American Cancer Society reports that in the U.S. medical care and lost productivity related to smoking totals $7.18 per pack. Overall, the economic cost of smoking equals about $3,391 per smoker per year.
The Campaign for Tobacco Free Kids, citing multiple sources, reports that federal and state expenses “for smoking-caused Medicaid payments (are) $30.9 billion,” and “smoking-caused Medicare expenditures each year (are) $27.4 billion, plus $9.6 billion spent for veterans’ health care related to smoking, and ,the “annual health care expenditures solely from secondhand smoke exposure (are) $4.98 billion.”
Tax tobacco to the max. Freedom from tobacco improves the quality of life for all of us.

Joe Rutherford