300% Proposed Tobacco Tax Increase Criticized
A measure on the November statewide ballot, Proposition 86, that would increase the state tobacco tax from 87 cents to $3.47 per pack to fund health programs "is the latest in a national trend to stamp out smoking by making it too costly," USA Today reports (Welch, USA Today, 7/24).
Supporters of the measure estimate that the tax increase would generate $2.1 billion annually to provide:
- $758 million for hospital emergency care;
- $371 million for children's health insurance;
- $267 million for cancer, heart, asthma and other disease programs;
- $177 million for tobacco prevention and educations; and
- $96.5 million for tobacco-related disease research (California Healthline, 6/21).
However, Brian Stenson, deputy director of the Rockefeller Institute of Government, said revenue estimates from tobacco taxes usually are wrong because they do not account for the "erosion in taxable sales" and money lost from tax avoidance.
Charles Janigian, president of the California Association of Retail Tobacconists, said the measure also could hurt California businesses because the proposal "would drive more and more businesses to the Internet and to mail-order companies outside the state ... who are not required to collect and pay tax."
Steve Remige, president of the union that represents Los Angeles County sheriff's deputies and investigators, said he opposes the tax increase because higher cigarette taxes can lead to increased black market sales of tobacco products (USA Today, 7/24). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.