Utah Senate Committee Rejects First of Two Cigarette Tax Increases
February 26, 2010
A bill in Utah to almost triple the cigarette tax from 69.5 cents to $2 per pack has failed in committee, although there is another bill coming right behind it to increase the tax to $1.70.
Representative Paul Ray was upset that the bill failed, saying “There are still a lot of holes to be plugged. That money is needed.” But the same statement could be made of any tax increase. The fact that a state can’t balance its budget is not a justification for any and all tax increases. A punitive tax on cigarettes must be justified on its own merits, and as we have said many times before, the current level of cigarette taxation is very difficult to justify. And a recent paper by Tax Foundation Chief Economist Patrick Fleenor explores the cigarette tax data in Georgia and finds that the tax tends to shift income from low- to relatively high-income areas of the state.
Hopefully the rejection of this first bill is a sign that lawmakers realize that trying to balance the budget on the backs of a politically unpopular minority is bad policy.