Everyone knows that increased taxes on tobacco products result in lower tax revenues, not higher, because they encourage illegal sales of bootlegged tobacco products. People also cross borders and use the Internet to purchase their tobacco products which eliminates all tobacco taxes from the state’s coffers
Topeka, Kansas (Vocus) April 20, 2010
When Kansas lawmakers reconvene April 28, they will be asked to help tackle a projected $467 million shortfall in the state budget with Senate Bill 516 which proposes a hike in Kansas tobacco taxes, a move that will badly backfire, predicts the International Premium Cigar & Pipe Retailers Association.
Anti-smoking and other well-heeled tobaccophobic groups are pressuring legislators to more than double the cigarette tax – from $.79 per pack to $1.79 - while raising taxes on other tobacco products like premium cigars and pipe tobacco up to 300 percent.
The groups are running an expensive newspaper and radio campaign against the efforts of IPCPR, a not-for-profit group representing small businesses such as mom-and-pop tobacco stores and smoke shops. Part of the prohibitionists’ pitch in seven newspapers and 26 radio stations across the state says the higher tobacco taxes will cut smoking among adults and discourage young people from smoking.
“Everyone knows that increased taxes on tobacco products result in lower tax revenues, not higher, because they encourage illegal sales of bootlegged tobacco products. People also cross borders and use the Internet to purchase their tobacco products which eliminates all tobacco taxes from the state’s coffers,” said Chris McCalla, legislative director of the IPCPR.
“Increased tobacco taxes are wrong for the times and wrong for Kansas,” he said.
McCalla said principal arguments being offered in support of higher tobacco taxes are ill-founded and will backfire. He urged the public to contact members of the Kansas Senate Committee on Assessment and Taxation and tell them they are against SB516 which they are currently reviewing.
“Such taxes never produce the kinds of new revenues that they are projected to raise. They actually cost the state revenues because people find other, non-taxable ways to get their tobacco, mainly out of state or through illicit avenues. The state continues to lean on the backs of tobacco – small business owners like our members who are struggling to stay in business. With the tight economy, our retailers are providing jobs to their employees and paying taxes that the state needs. To tax them further will only hinder and possible jeopardize their operations,” he said.
McCalla said that the proposed increase in tobacco taxes would hurt the citizens of Kansas, small businesses and would barely make a dent in the state’s deficit.
“The last thing Kansas needs now is lower tax revenues, lost jobs and closed businesses,” McCalla said.