Tuesday, December 26, 2006

Back on December 2, 2003, I wrote this entry in another blog. On January 1, the excise tax on cigarettes in Texas is going from $.41 to $1.41. This magic tax will do three things: Stop everyone from smoking, increase tax revenue, and fund education in the state. Though I still don't see how getting the number of smokers to zero is going to increase tax revenue and fund education (because if no one is smoking no one is paying the tax). Anyway, here's a moldy oldy from the archives:

Why Excise Taxes to Stop Behavior are a Bad Idea

A news story out of Austin reveals that a public policy wonk has decided that raising the excise taxes on cigarettes in Texas to $1.41 per pack (from $.41 per pack) will "reduce smokers, cut health care costs and help finance public schools" by generating $986 million in new revenues.

Bull! It will reduce smokers. Sure there will be a short-term gain in revenues, but if the number of smokers decrease, then the revenues will too.

The Centers for Disease Control released a study that concluded a 10% increase in excise taxes results in a corresponding 10% decrease in consumption.

Meanwhile, the State of Texas has been using its share of the tobacco settlement to fund anti-smoking programs, and these programs have been fairly successful. According to the State of Texas Fiscal Size Up 2002-2003 in 1998 the State collected $623.6 million in excise taxes. In 2003, the expected revenues are $562.6 million. That is a 10% decrease in revenues. A new study by the CDC, trumpets the fact that anti-smoking programs work!

The CDC recommends stiff tax increases, and increased funding for anti-smoking programs.

So here we have a guy that says raising cigarette taxes will reduce public health care costs and fund public schools! Wow! What a great tax!

There is a group called Trust for a Smoke Free Texas who advocate this plan to raise revenue, even though they want this revenue source to dry up! On the page that has a report on this latest tax proposal they show a woman carrying a tray with a bottle of beer and an empty glass. What are they going to go after next, I wonder?

The only way this tax increase will work is if every Texas resident is required to buy a pack of cigarettes every month!

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