Of the more than 20 proposed tax increases being discussed by the S.C. Legislature, none has received more attention thus far than the increase in the tax on cigarettes. Small retailers and convenience store operators throughout South Carolina will face significant losses in revenue and jobs if the state increases this tax. All retailers who sell tobacco products will lose revenue, but it will hurt the small operations most.

The proposed cigarette tax will have a huge impact. If passed, it will be the largest percentage tax increase in the history of the state. According to figures generated by the S.C. Policy Council Education Foundation based on the experience of other states, a cigarette tax increase could result in approximately $13 million in lost sales taxes for South Carolina and $65 million in lost profits for retailers and wholesalers, as smokers seek to purchase products through other channels. Those lost profits will lead to 972 South Carolinians losing their jobs.

Sales of cigarettes and other tobacco products made up nearly 39 percent of convenience store sales in 2001. Tobacco is a legal product important to all retailers that sell it, but particularly important to convenience stores and other small retailers.

If the tax is increased, many customers will obtain their cigarettes through the Internet, purchase in lower-tax states, mail order channels, on Native American reservations and on the black market that will flourish in a higher tax environment. Not only will South Carolina lose the cigarette tax on all the purchases through alternative channels, the state and local governments will lose the sales tax on tobacco products, and state retailers will lose significant sales.

Sales of tobacco products through alternative channels also have the potential for increasing the availability of tobacco to young people not old enough to buy the products legally. That would run counter to youth smoking prevention efforts.

One of the alternative channels -- the black market -- raises law enforcement issues because it thrives on the illegal activity of smuggling cigarettes from one state to another in direct violation of state law. We also know from recent convictions in a federal court case in Charlotte that profits from cigarette smuggling have been used to benefit a terrorist organization.

This proposed tax increase is ill timed, ill advised and will exacerbate existing economic problems in the private sector. It is just plain wrong.

Washington is going through these same tough times. President Bush is pushing hard for tax cuts -- not increases -- as the right way to stimulate the economy. Is anybody paying attention out there?