DeLeo all but kills cigarette tax hike

House Speaker Robert Deleo is expected to give a speech today that will all but kill hopes for new or increased taxes and fees in the next budget.

“For the past two years, this House has rejected balancing the budget with new taxes and fees,” DeLeo said in prepared remarks. “Any changes to revenue policy should be approached with extreme caution and should never be done piecemeal. As such, we will release a budget from the House Committee on Ways & Means that does not rely on new taxes and fees.”

More on his expected speech here.

It is more than likely that the proposed 50-cent increase in the cigarette tax is dead. Still one of the stranger aims behind that proposed increase is that it will discourage smokers while still lead to an increase in revenues.

If your goal is to raise revenues you do not want to decrease the number of people paying the tax because that leads to a lower amount of revenue collected. It is easy to avoid this problem with income and property taxes but it is harder to do this with consumption taxes. People can obtain cheaper cigarettes if they really want to avoid paying the state tax. New Hampshire, already sans sales tax, just cut their cigarette tax to $1.58 a pack. A hike would lead to a loss of business for local retailers as consumers head north for cheaper smokes. Meanwhile any increase in taxes on tobacco products disproportionately hits the poor.

If the goal of the tax is to stop people from smoking why not make the tax $10.00 a pack? Heck, why not ignore the steady decrease in smokers and just cut to the chase already and outlaw smokes entirely?