Here’s Why The Louisiana Legislature Shouldn’t Raise The Cigarette Tax

What if I told you that an idea being floated to save Louisiana from financial disaster is to raise taxes on a product that has been all but banned in one of its major cities? You would think I was insane. Unfortunately, this idea has gained enough traction that a bill has been filed to do just that.

State Rep. Harold Ritchie (D-Bogalusa) has filed HB 77, which is a constitutional amendment to increase the taxes on a pack of cigarettes from $0.36 per pack to $1.54 per pack. Yeah, let that sink in…

I will let a much more learned man than I am, Jeff Sadow, explain the reasoning behind raising tobacco taxes.

Often, supporters of higher tobacco taxes offer as reason for these that these will discourage people from smoking by pricing some users out of the habit. Yet just as often the actual legislation, referring to a number of examples from Louisiana’s recent past (such as in 2009), are just thinly disguised revenue-raising measures as their extra take goes to fund general government functions. Saying one thing while meaning another, in that these hikes really are about more money for government and not so much saving lives, by supporters need not disqualify legislation, but the actual uses to which the proceeds get spent matters because tobacco taxation notoriously underperforms in revenue calculations, and by definition this is wasting in nature; i.e., the more successfully it discourages, the less revenue accrues. Thus, it’s bad policy to use these dollars except to pay for things related to the behavior discouraged, in this instance such as health problems associated with tobacco use.

Ritchie’s constitutional amendment does not specify using the money for anti-tobacco measures, so we can safely assume that it’s a money grab. As prices go up, people seek out alternatives to tobacco cigarettes such as vaping or quitting smoking altogether. With New Orleans enacting smoking bans, other Louisiana cities will follow suit. What this means is fewer smokers equals less tax revenue for the state of Louisiana. I am looking forward to the “start smoking” PSAs that the state government will have to launch to encourage the money to keep rolling in.

Ritchie believes the solutions to Louisiana’s financial mess is giving the state of Louisiana more money. He and State Sen. Ben Nevers (D-Bogalusa) have filed a constitutional amendment to impose an oil processing fee.

If the Louisiana Democrat Party believes that supporting higher taxes are the way for it to higher office, by all means keep proposing them. Meanwhile, they will keep getting hammered on the state level as they have been since 2007.



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