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Cigarette tax rises $1 a pack on Jan. 1 [TEXAS]
STAR-TELEGRAM AUSTIN BUREAU ^ | Dec. 09, 2006 | JOHN MORITZ

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 state’s school finance system enacted by lawmakers in the spring. It’s the first increase in the state’s 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 I’m waiting for the pending disaster that’s going to hit us Jan. 2 when we open the doors,” said Drumm, 59. “I’m concerned what it’s going to do to my business, and I’m concerned what it’s 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 don’t 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, he’d 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 comptroller’s 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 don’t 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 Year’s Day reminder from the state. Ancira said the comptroller’s 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 jmoritz@star-telegram.com


TOPICS: News/Current Events
KEYWORDS: pufflist; taxes
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That much more business for the Indian Reservations....


41 posted on 12/10/2006 3:30:47 AM PST by wodinoneeye
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To: xowboy

Nope. And our fearless leader has also recently come out against a fence along the border. Of course he his campaign ads places him for border security; fence was not mentioned in those ads. His press people made this significant distinction when he was called out on his fence comment.

Folks, we gotta read the fine print even in the ads ...


42 posted on 12/10/2006 4:08:34 AM PST by ByteMercenary (9-11: supported everywhere by followers of the the cult of islam.)
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To: xowboy

No, Gov. Goodhair would never do something as conservative as cutting spending. He is a spendaholic rino. And once again I am vindicated in my vote for Kinky.


43 posted on 12/10/2006 4:14:45 AM PST by Hydroshock ( (Proverbs 22:7). The rich ruleth over the poor, and the borrower is servant to the lender.)
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To: midnightson

Mama-the ultimate prognosticator- said there'd be days like this
______________________________

Hmm did she also tell you that your day will come too? Whatever it is you may choose to do will eventually, be taxed, then regulated, then banned etc, etc, etc. Well if she did't she should have.
Goner I may be, but that is my choice and none of your business. BTW any links to prove that non-smoker will live forever.


44 posted on 12/10/2006 4:15:10 AM PST by xowboy
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To: Dubya
Welcome to the state of Taxes (please note new correct spelling)
45 posted on 12/10/2006 4:17:59 AM PST by Hydroshock ( (Proverbs 22:7). The rich ruleth over the poor, and the borrower is servant to the lender.)
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To: Liberty Valance

It used to be. Until all the northerner's came in droves.


46 posted on 12/10/2006 4:19:12 AM PST by bonfire
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To: Hydroshock

Kinky---that would have been interesting to see.

I have often tried to imagine where we would be as a country today had Goldwater been elected.


47 posted on 12/10/2006 4:23:52 AM PST by xowboy
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To: xowboy

Amen.


48 posted on 12/10/2006 4:26:18 AM PST by Hydroshock ( (Proverbs 22:7). The rich ruleth over the poor, and the borrower is servant to the lender.)
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To: Dubya
and is expected to generate about $700 million a year until smoking rates begin dropping off, expected in 2010.

Healthy People 2010 is part of the UN agenda

--------------------------

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.

Texas Has At Least $53.77 Billion In Surpluses as per the 2003 Report.

This is how all government screams 'mo money' while rolling in it.

They have the beginning years budget, subtract what they use, and any 'leftovers' are shuttled into accounts while the books are again zeroed out for the next year.

It's why they ALWAYS complain that the government is 'broke'.

49 posted on 12/10/2006 4:31:43 AM PST by MamaTexan ( I am not a ~legal entity~....... nor am I a 'person' as created by law.)
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To: Dubya
I wouldn't even consider participating in this market.
50 posted on 12/10/2006 4:33:48 AM PST by Caipirabob (Communists... Socialists... Democrats...Traitors... Who can tell the difference?)
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To: MamaTexan

"It's why they ALWAYS complain that the government is 'broke'."
_____________________________________

Note to the government: SO ARE WE!!!!!


51 posted on 12/10/2006 4:57:58 AM PST by xowboy
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To: xowboy
Note to the government: SO ARE WE!!!!!

AMEN!

:-)

52 posted on 12/10/2006 5:10:18 AM PST by MamaTexan ( I am not a ~legal entity~....... nor am I a 'person' as created by law.)
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To: SheLion

Female Lion (can I just call you Nala from now on?):

You're right. There are no good guys here.

The tobacco companies don't care about anything other than profits.

The Anti-tobacco Nazi's don't care about anything other than their MSA payments and tobacco excise taxes which pay for the lease on their Lexus ES 330.

Politicians don't care about anything other than campaign contributions from RWJF and votes.

Non-smokers don't care about anything other than not having to deal with the stinky smell.

Smokers don't care about anything other than being left alone.

I think you are starting to get it SL. Let's ban tobacco. Let the Anti Nazi's go out and get a real job.

We can roll our own or buy better tobacco from the folks who discovered the crop to begin with:

THE NATIVE AMERICANS.

If the Southern Republicans who devoutly believe in God are right, than the states like CA, NY, NJ and MA will get poorer while the Native Americans who White Men like Elliot Spitzer have pissed on for 400 years will GET RICH.


53 posted on 12/10/2006 2:39:32 PM PST by Eric Blair 2084 ("Life is tough. It's tougher when you're stupid."--John Wayne)
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To: Redbob

I'd sure hate to be a smoke shop owner in the Texas half of Texarkana....


54 posted on 12/10/2006 2:42:24 PM PST by ErnBatavia (recent nightmare: Googled up "Helen Thomas nude"....)
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To: Dubya

Heres a novel idea, how about taxing parents based on the number of children they have enrolled in the local school system.


55 posted on 12/10/2006 2:51:39 PM PST by mylife (The roar of the masses could be farts)
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To: Hydroshock

I would have voted for Kinky but I was scared to death that Bell would win If I did.

Perry sucks but Bell sucks worse


56 posted on 12/10/2006 2:54:06 PM PST by mylife (The roar of the masses could be farts)
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To: Dubya

It's for the children. /sarc


57 posted on 12/10/2006 2:58:22 PM PST by unixfox (The 13th Amendment Abolished Slavery, The 16th Amendment Reinstated It !)
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To: Eric Blair 2084
I think you are starting to get it SL. Let's ban tobacco. Let the Anti Nazi's go out and get a real job.

I've known this for a long time.  The lawmakers talk out of both sides of their mouths.

They scream they want a smoke free state, but then they raise cigarette taxes on their smoking constituents because they can't balance a state budget without doing so.

So, if they had a smoke free state, just where would they get their tax dollars then?  I'm curious..........

58 posted on 12/10/2006 3:18:58 PM PST by SheLion (When you're right, take up the fight!!!!!)
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To: mylife

I fear that in 4 years Gov Goodhair will make Bell look like a God send he way he is going.


59 posted on 12/10/2006 3:38:52 PM PST by Hydroshock ( (Proverbs 22:7). The rich ruleth over the poor, and the borrower is servant to the lender.)
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To: SheLion

Nala, you saw what happened in North Dakota when Mike Grosz proposed a tobacco sale ban in the state.

I asked rhetorically who showed up to protest. Philip Morris, SheLion? You thought I was being derogatory.

No. I luv ya and would never do that.

I was trying to point out for other FReepers the hypocrisy of it all.

The Gubmint is more addicted to tobacco revenue than any smoker is to nicotine.

We can quit smoking...the Democrats and liberals can't quit taxing and spending. It's who they are.


60 posted on 12/10/2006 4:23:23 PM PST by Eric Blair 2084 ("Life is tough. It's tougher when you're stupid."--John Wayne)
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