THIS SUMMER, THE state of Nevada increased its cigarette tax by
45 cents, to 80 cents per pack. In so doing, it became the 31st
state to increase the cigarette tax in the last year and a half.
Here in South Carolina, it was easy -- even for the overwhelming
two-thirds of us who supported raising our own rock-bottom cigarette
tax -- to get caught up in the legislative rhetoric about protecting
the public from "massive tax increases" and not singling out a
discriminated-against minority to shoulder the burdens of the entire
society. The fact that this was so easy made it even easier to
forget how far outside the mainstream our state continued to float
when the S.C. General Assembly refused to raise the cigarette tax
this year.
Louisiana. Maryland. Tennessee. Georgia. (Fun fact from Georgia:
When the tax went from 12 to 37 cents a pack, newspapers reported
that retailers were charging an extra $2 a pack.) And on and on for
31 states. Not just the tax-happy Northeast. Not just the loony left
coast. Thirty-one states, from sea to shining sea.
While 31 other states were raising their cigarette taxes, we
continued to collect just 7 cents per pack -- far less than a penny
a cigarette. Less than the tax in every state except Virginia,
Kentucky and North Carolina. Hardly enough to justify even
collecting the tax.
South Carolina's budget crisis would not be over if the
Legislature had raised our cigarette tax to the national average. We
would still be facing mid-year budget cuts -- again. We would still
be facing more budget cuts next year. We just wouldn't have had to
cut quite so deeply this year, which means the next two rounds of
cuts wouldn't have been quite as difficult. If we join the majority
of the country and raise our cigarette tax next year, it will not
dig us out of our financial crisis; it will merely ameliorate the
pain.
The greatest benefit of a cigarette tax is and always has been
its impact on teen smoking. The studies are clear and consistent:
Higher cigarette taxes mean reduced teen smoking. That's illegal
teen smoking, the type the cigarette companies say they also want to
stop.
The secondary benefit is the one you get anytime you catch a
per-item tax up with inflation: bringing your tax system back into
line with what it was intended to be. You'd have to raise our tax to
42 cents a pack just to tax cigarettes at the 1977 level.
The fact that all the other states are raising their cigarette
tax -- while making dramatic cuts to their budgets and making few if
any changes to the taxes that automatically adjust for inflation --
just demonstrates how radical our legislators are in their
determination to protect their friends in the cigarette industry or
cling to an anti-tax mantra in the face of overwhelming support --
and logic -- for a selected tax increase.
Oh, but tax policy shouldn't be used to influence behavior, you
say? OK. Then stop giving tax breaks to businesses that bring lots
of jobs to the state. Stop giving tax breaks designed to lure
wealthy retirees to the state. Get rid of all the sales tax
exemptions, which were passed to encourage a given type of
behavior.
Tax policy has always been used to influence behavior. And the
excise taxes on cigarettes and alcoholic beverages were among the
very first examples of that type of behavior manipulation. The
problem with our cigarette tax isn't that it influences behavior.
It's that it's so out of date that it doesn't influence behavior the
way it was intended; it no longer serves as a deterrent to smoking.
On top of that, it doesn't generate much revenue. And in this state,
we need more of
both.