Skip to comments.Cigarette tax rises $1 a pack on Jan. 1 [TEXAS]
Posted on 12/09/2006 8:23:24 PM PST by Dubya
AUSTIN C.O. Drumm is fuming mad, but James Gray is breathing easier.
Both are talking about the $1 increase in the tax on a pack of cigarettes that Texas smokers will start paying Jan. 1 as part of the sweeping overhaul of the states school finance system enacted by lawmakers in the spring. Its the first increase in the states levy on tobacco products since 1991 and is expected to generate about $700 million a year until smoking rates begin dropping off, expected in 2010.
Drumm, who for 14 years has owned Smokes Etc. on Alta Mere Drive just south of Interstate 30 in Fort Worth, said he expects to bear a disproportionate share of the new tax burden.
Business otherwise has been pretty good, but Im waiting for the pending disaster thats going to hit us Jan. 2 when we open the doors, said Drumm, 59. Im concerned what its going to do to my business, and Im concerned what its doing to our freedom to make choices on how we live our lives.
Life for Texans will be healthier, said Gray, government affairs director for the American Cancer Society.
We know exactly what will happen once this tax takes effect, Gray said. There will be a slight reduction in cigarette consumption. But more importantly, it will discourage young people who dont smoke from ever starting. Kids are so much more price-sensitive than adults are, and a dollar per pack is quite significant. Taxing poison
State lawmakers had been toying since 2003 with the idea of raising the tax on cigarettes and other tobacco products. Some Democrats, led by state Sen. Judith Zaffirini of Laredo, said a $1 per pack increase could have helped pay for an array of public health and smoking-cessation programs.
The effort met with stiff resistance in the Republican-controlled Legislature until the courts ordered lawmakers to replace the property-tax-dependent school finance system with a plan that would pass constitutional muster. Gov. Rick Perry, who was among those resisting a new tax on tobacco even as the state faced a $9.9 billion budget shortfall four years ago, embraced the idea as part of the school finance package.
What the governor said was that if the choice was between taxing poison and taxing property, hed go with taxing poison, said Perry spokesman Robert Black.
The American Cancer Society predicts that the increase, which will put the state tax at $1.41 per pack, will help persuade about 143,300 adult Texans to give up the habit while helping persuade about 284,000 young Texans from ever lighting up.
But Drumm and several smokers rights organizations said the more likely outcome will be to send some smokers to states with lower taxes. Others will turn to the black market or the Internet, where they could avoid the state tax and where, the organizations say, minors can easily get around the age restriction on tobacco sales and where product quality cannot be assured.
According to the Campaign for Tobacco-Free Kids, online sales accounted for 14 percent of the U.S. cigarette market in 2005, and children as young as 11 had a 90 percent success rate when attempting to purchasing cigarettes over the Internet.
Although a recent court settlement has forced some online vendors to hand over purchase records to states so customers can be contacted and forced to pay state taxes, an official with the Texas comptrollers office said the cost of tracking down online cigarette buyers would likely outweigh the revenue that might be recouped.
Jesse Ancira, associate deputy comptroller, said his office expects black market and gray market cigarette sales in Texas to escalate. And he said that it will be difficult to stop people from circumventing the tax through Internet sales and cross-border purchasing.
We simply do not have the tools to undertake vast enforcement efforts, he said. We are aware of the risk of underground activity, and we will pursue any leads or complaints that come to our attention. Chipping away
Gray, of the American Cancer Society, said many smokers and many more would-be smokers might find it easier to quit than to jump through such hoops to avoid the tax. And fewer smokers means that Texas can finally start whittling away at the $1.5 billion a year in Medicaid expenses that smoking-related health problems cost taxpayers, he said.
Drumm, whose Fort Worth store also sells cigars and an array of products for pipe smokers, said the new tax unfairly targets a segment of society that has used a product legally available for centuries.
The government keeps chipping away and chipping away at our freedoms, Drumm said. If they dont approve of the way we chose to live our lives, they try to tax us into changing the way we live.
Drumm said most of his customers are aware that the tax increase, which will drive the price of popular-brand smokes from about $35 a carton to about $45, is coming. And many have been stocking up since September.
And those who might not be aware will get a New Years Day reminder from the state. Ancira said the comptrollers office will have enforcement teams monitoring wholesale distributors and retailers statewide Jan. 1 to make sure the new tax is being collected.
We will be working the holiday, he said. IN THE KNOW Comparing the states
As of Jan. 1, 2007.
Texas: $1.41 a pack, 16th-highest in the nation
Arkansas: 59 cents a pack, 34th-highest
Louisiana: 36 cents a pack, 42nd-highest
New Mexico: 91 cents a pack, 24th-highest
Oklahoma: $1.03 a pack, 20th-highest
Lowest cigarette tax: South Carolina, 7 cents a pack
Highest cigarette tax: New Jersey, $2.58 a pack
SOURCE: Campaign for Tobacco-Free Kids John Moritz, 512-476-4294 email@example.com
Anyone able to calculate the hit Social Security would take if just half the smokers quit?- The beauty of smoking is the long period of time it takes to kill you- you pay in all those years and then, after an interminable amount of time and expense, you're a goner, and never collect a dime- Ain't Phillip Morris great!
Huge cigarette taxes don't do anything except make pork for politicians. "When you're too spineless to
cut spending, stick it to the smokers and claim it's for their own good!"
Comparing Excise Taxes on Cigarettes, Beer and Wine
Number of six-packs of beer that must be sold in Texas to produce the same state excise tax revenue generated by one carton of cigarettes: 36.8
Number of bottles of wine that must be sold in Texas to produce the same state excise tax revenue generated by one carton of cigarettes: 101.4
Excise Taxes Sales Taxes Tobacco Settlement Payments Total Smoker Payments
507,341,000 $261,377,000 $519,900,000 $1,288,618,000
TOTAL SMOKER CIGARETTE PAYMENTS TO TEXAS FY2005
Texas may very well be a GOP state but it's no longer a conservative state.
No need to dirve out of town. Mexican gangs are already bringing cigaretts up from Mexico. Mexican gang bangers in Dallas have been selling cigaretts from Mexico for a month now. Word on the street is profits are just OK now but January 1 they will jump up.
You don't know squat, Mr. Gray. Everybody will be buying cheap and tax-free from the online Indian reservation smokeshops. Because Texas got greedy and tried to force people to give up their tobacco, they will wind up forfeiting the revenue they would have continued to reap.
Tax revenues are fungible. When you introduce a lottery to fund education, the property/income/sales tax revenues that were previously used for education are replaced by the lottery money. The level of funding doesn't go up. It remains level and the property/income/sales tax revenues get diverted to different pet projects that the politicians really wanted to fund with a tax increase. The lottery is a voluntary tax on fools who expect to win.
Eventually, the lottery isn't enough and the politicians return to raise property/income/sales taxes to fund the insatiable appetite of the teacher's union.
Hey, that's even better!
Make sure you purchase with cash and collect your purchase in person. If you use a credit card and have the tobacco shipped to your home address, the BATFE and state will have the means to prosecute you for tax evasion.
Yep! You don't give the bast###s the gas tax either.
Whoa, what's this about the gas tax? Please explain.
Make it illegal. Put it to a consensus, and make those who vote to make it illegal put down their addresses. Send the zealots a bill for the difference. Let the black market reap the profits. That's my opinion.
So why are only 20-30% of the constituents forced to pay for the above instead of every citizen in Texas? Why is the burden being placed on smokers?
I thought Texas wanted a Smoke Free State? They talk out of both sides of their dirty mouths.........banning smokers, controlling smokers and restricting smokers, yet all the while, they can't balance a state budget withOUT the smokers.
Can't stand the high taxes?
Afraid to order off of the Internet?
Then start rolling your own!!! I find everything but the machine downtown at the local Smoke Shop. Also, Rite Aid and grocery stores also sell the bags of tobacco and the filtered tubes.
I roll out a beautiful carton for a little under $8 dollars. Premiums in my state are now up to $45-$50 a carton. Can you imagine the money I have saved over the past 4 years since I now roll my own? It's mind boggling.
$1.99 for 200 filtered tubes
Make your own cigarettes for as low as $6.99 per Carton! Smoke Quality FILTERED cigarettes that you make yourself using cigarette tubes (like a cigarette without the Cigarette tobacco), our cigarette making machines, and our "roll your own" cigarette tobacco.
-Stop Paying High Cigarette Taxes
-So Much Easier than "Roll Your Own" cigarettes!
If you don't drive out of state you don't use the extra gas so you don't give them the extra tax.
Got it! Another reason I like shopping online -- point, click, it's on the doorstep.
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