Just about a month ago, I reminded Florida legislators that cigarette taxes used to balance the budget don’t work.
To be clear here, if you want to get rid of cigarette smoking, raise taxes to the point people can’t afford it. That’s fine.
But don’t say you are going to balance the budget with a cigarette tax increase because all the data shows us that raising cost of buying cigarettes lowers the use rate, which decreases the revenue generated therefrom.
It’s Economics 101.
The Florida Legislature thinks otherwise.
According to the Miami Herald:
State Rep. Juan Zapata, R-Miami . . . filed a bill (HB 887) to increase the cigarette tax by 65.1 cents per pack, bringing the total to $1 a pack. It could raise $471 million a year.
“The (budget) situation calls for action,” said Zapata, who is chair of the Human Services Appropriations Committee. “We can sit here and try to hold true to our principles but at the same time we need to be pragmatic.”
Zapata and the Florida Republicans, including Charlie Crist who went from outright opposition to tacit support of a cigarette tax increase, should remember New Jersey:
In 2006, New Jersey raised its already high cigarette tax, thinking it would bring in an extra $30 million a year. It didn’t. Worse, it caused their actual collections to drop by more than $20 million. The tax increase threw the state’s budget off by $50 million, money that had to be made up by other taxpayers. This isn’t unique to the Garden State. Since 2003, there have been 57 cigarette tax increases across the country. In 37 (68 percent) of those cases revenues failed to meet projections.
Look – I don’t smoke. I don’t like cigarettes. I love the restaurant smoking ban in Georgia. But don’t try to balance the budget on cigarette taxes. It won’t work. It’s bad policy.