Tallahassee Democrat: Tobacco tax, It’s a symptom of bad fiscal habits
media mentionNovember 22, 2009
It’s a symptom of bad fiscal habits
When the Legislature was debating last spring whether to raise money by substantially boosting the taxes on tobacco, a couple of arguments were all that caused even a pause in enthusiasm for this “sin tax.”
One was that it would likely not raise the anticipate millions proponents envisioned because an additional $1 a pack tax would do more to cut smoking than to bolster the state budget.
The other was that it would hurt convenience stores, which would see a decrease in cigarette sales, which lead in turn to customers buying in-store snacks, beverages and impulse items.
The good news is that the $1-per-pack tax has worked the way its most optimistic supporters predicted. Sales of cigarettes have decreased — and by a substantial 27 percent — suggesting smokers are continuing to back off from the habit. But the revenues from the tax that has been in effect since July 1 are exceeding even the estimated the amount of revenue lost by the fewer sales.
State economists said last week that they expect the tax to raise $881 million this fiscal year and $907 million the next, revenues that are designated for Medicaid and health-care programs.
Last week’s Great American Smokeout Day offered another nudge to smokers to break the habit that is one of the most brutal of all to withdraw from — and reportedly gets harder the more a smoker is worried with financial problems.
Started 32 years ago, back when smoking was not only accepted but also glamorized — and cheap — the annual Smokeout challenges are part of what’s changed our culture for the healthier. Now countless, perhaps most, public and private areas are designated smoke free, and the dangers and health-care costs to individuals and the nation are well known.
Even quitting has become more of a team sport, with tobacco-cessation programs in place for those who really want to quit, and nicotine replacement therapy, such as patches, gum and spray, are found to be effective.
It’s not a perfect tax by any means, though, hurting convenience stores as predicted. This is especially true in North Florida, where in 14 border states smokers may drive across into Georgia or Alabama, where cigarettes are 97 cents and 91 cents cheaper, respectively, because of Florida’s state tax of $1.34 per pack.
But there is no such thing as a perfect tax — and especially not in Florida.
Our state is ranked the second-worst state in the country in terms of low- and middle-income people paying a larger share of their income in state and local taxes than do the wealthiest families. This is according to this month’s report from the Institute on Taxation and Economic Policy in Washington — and it’s important to note that it’s not the dollar amount paid in taxes, but the percentage of income paid by lower-income families that contributes to the unfairness of our tax structure. The heavy reliance on sales tax is key to the regressiveness, and so is the property tax structure that is out of balance because of an array of amendments that punish newcomers, rental-property owners, small businesses and lower-income folks for whom, again, a larger percentage of their income is going to taxes.
So while the cigarette tax does not represent the worst of all possible worlds, it was and remains another way in which lawmakers avoided a complete overall of our state’s antiquated, out-of-balance tax structure.
Political avoidance of facing up to this reality is apparently a hard habit to break as well.