Utah Considering Cigarette Tax Increase

March 3, 2010

A bill passed by the Utah house would increase Utah’s cigarette tax by about a dollar—from 69.5 cents a pack to $1.70. With the tax increase, Utah would move from having the 15th lowest cigarette taxes in the country to the 16th highest. And once again, a state would turn to an unpopular minority for revenue.

I do not doubt Rep. Paul Ray’s (who introduced the bill) motive of wanting to help smokers…

Ray said the hike would give those who smoke a reason to quit while providing the added benefit of generating $43 million in much-needed tax revenue.

“My intent in raising the tax all along is to get kids to stop smoking,” Ray said.

He also said it could offset Utah’s Medicaid costs linked to smoking-related illnesses. The Utah Department of Health says nearly 1,150 Utahns die every year because they smoke.

This is the third year in a row that Ray has proposed increasing the tax. A traditional aversion to hikes of any kind has stalled the bill in the past.

…But first of all, it should not be the Utah government’s business who chooses to smoke in Utah. If Rep. Ray wants to spend his own time persuading people to quit smoking, great. It’s a bad habit. But public policy has no role when costs are private. His citing of social costs through Medicaid has no basis. And his note of how many people die each year because they voluntarily smoke, while regrettable, is again not an issue for public policy.

15 states increased tobacco taxes last year. That many politicians cannot happen to have bursts of concern over smoker’s welfare during a recession. Sin taxes go up during recessions mainly because they are revenue grabs.

Some might claim that without a tax increase like this, Utah will be in trouble and residents will suffer. But those protesting spending cuts, or seeking more revenue for spending increases, will always be making that case. M. Royce Van Tassell at the Utah Taxpayers Association says:

Less than 24 hours after House and Senate Republicans took caucus positions against a tax hike, spending advocates began warning of dire consequences. The Utah Education Network proclaimed a need for more state money to help serve rural Utah. Activists worried that the state may not be able to fully fund prenatal care programs for low-income mothers or that reductions to programs serving victims of domestic violence and child abuse might be necessary.

Such warnings arise during every budget process. When budgets are tight, and cuts must be made, the spending lobby has multiple sympathetic causes that demand priority and additional state funding. But when budgets are flush, and spending is up, the requests are just as abundant.

Utah should not lean on a politically unpopular minority to fund its government—during good times or bad.


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