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!