Thoughts from a Yellow Dog Democrat living in Olympia, in the great BLUE state of Washington

I am a liberal because it is the political philosophy of freedom and equality. And I am a progressive because it is the political path to a better future. And I am a Democrat because it is the political party that believes in freedom, equality and progress. -- Digby

Wednesday, April 01, 2009

Cigarette Taxes

Politicians are looking for ways to make up the difference in budgets by secretly raising taxes on those with the least amout of clout to object. I'm one of those paying more than an equitable share of taxes -- I smoke.

USA Today is touts that a raise in cigarette taxes causes people to quit.
"This is very historic," said Matthew McKenna, director of the Office of Smoking and Health at the Centers for Disease Control and Prevention.

Before the tax hike, cigarette prices averaged about $5 a pack. Now, tobacco companies are raising prices by different amounts. Some are absorbing part of the increase; others are raising prices more.

In the past, a 10% price increase reduced cigarette consumption about 4%, McKenna said. He expects the federal tax hike to prompt at least 1 million of the 45 million adult smokers to kick the habit.

"We expect this to accelerate the decline" in cigarette consumption, said Bill Phelps, spokesman for Philip Morris USA, the nation's largest tobacco company. He said consumption has been dropping 3% annually for a decade. "Some people may quit smoking," he said. "Others may cut back."

Nik Modi, a tobacco industry analyst at UBS, expects cigarette consumption to drop by about 9% annually. Tobacco companies won't be badly hurt, he said, because they've prepared for the increase.

But if we quit -- who pays for SCHIP? Who makes up the budget deficite in the state of WA? Politicians are gambling that we won't quit. They need the dollars too much.

And in my state -- Washington -- the politicians have gotten really greedy. We're 5th in the Nation for cigarette taxes. The raise will cause a pack of my Virginia Slims to go to $7.43. It will definately change my smoking behavior. So the politicians banking on my taxes will come up short again.

This is a piss poor way to finance a government.


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