Criminal Justice, Elections, Peter Blake, Taxes, Uncategorized

Blake: Amendment 72 and the twisted logic of hiking tobacco taxes

Sure, why not triple the state cigarette tax, as Amendment 72 on the Colorado ballot proposes?

File photo - Todd Shepherd
File photo – Todd Shepherd

It’s no bucks out of my billfold, and look who’s for it: Every goodthink organization you can think of, from the American Cancer Society, the American Heart Association, the American Lung Association and the Alzheimer’s Association of Colorado right through the (huh?) Veterans of Foreign Wars Post 1. No more “smoke ‘em if you got ‘em” in this man’s army, apparently.

There are 87 organizations listed on a Yes on 72 Web site and more are said to be coming on board.  There’s hardly a Coloradan who is more than two degrees of separation from membership in one of them.

The state tax on cigarettes would jump from 84 cents a pack to $2.59 (in addition to the federal tax of $1.01 a pack).  The excise tax on other tobacco products would jump from 40 percent of the price to 62 percent.

Icon_2016_Op_EdWho doesn’t love sin taxes?  Relatively few people smoke anymore, and maybe the higher price will get them to stop. We’d be doing their health a favor by making their bad habits more expensive!

But the best thing about sin taxes is that those who righteously promote them get to share in the proceeds! The amendment spells out how the $315.7 million produced by the new taxes in the first year is to be distributed.

For instance, 27 percent to research grants for the study of tobacco-related health issues, to be administered by the health department;

18 percent (up to $36 million a year) on health related programs funded by previously approved tobacco taxes, including Medicaid, children’s health care and tobacco education programs;

16 percent for anti-tobacco education programs;

14 percent to improve the health of veterans and find employment for them. (Aha, now you know why the VFW is involved);

10 percent for child and adolescent behavioral health;

10 percent for construction of or improvements to community health centers for the poor;

5 percent for student loan repayment for those training as health care professionals.

With all these worthy charities counting on additional tax money for their budgets, you’d be doing them a favor by smoking more, not less.

The opposition, No on Amendment 72, maintains that “less than 20 percent” of  the proceeds would go to smoking prevention, and that more than half of the money is earmarked for programs that aren’t even determined yet.  It also argues that the $1.6 billion from tobacco taxes paid through the years has been spent on programs unrelated to anti-tobacco programs.

“If we’re going to tax smokers hundreds of millions more per year, then more of the new money should be dedicated to helping smokers quit or keeping kids from starting,” say the opponents.

Those who support Amendment 71, which would make it much harder to amend the state constitution, couldn’t possibly support 72, which would weirdly put in that cluttered document specific allocations of tax revenues toward various special interests that could fade or change over time.

The sponsors must certainly understand that problem, but they need to make the change in the constitution because Amendment 72 — of course!—excludes the tax proceeds from spending limits imposed by the Taxpayer’s Bill of Rights. You can’t do that by statute.

If Yes on 72 wants even more support, they should look just north of the border.  Wyoming is full of entrepreneurs — fireworks dealers, gas stations, convenience stores etc. — who would just love to expand their customer base by selling Coloradans many cartons of cheaper cigarettes. After all, the tax in Wyoming is just 60 cents a pack, 8th lowest in the nation.Tobacco210

Entrepreneurs who don’t mind risking a run-in with revenooers might even drive Wyoming cigarettes into Colorado for resale here.  Colorado, which now has the 14th lowest tax rate, will go to 12th highest if the initiative passes.

The high probability of cigarette smuggling wasn’t mentioned in the ballot blue book soon coming your way.   The Legislative Council included only two arguments against No. 72: that low-income smokers would be hurt the most, and the constitutional problem mentioned above.

But tax experts Michael LaFaive and Todd Nesbit of the Mackinac Center for Public Policy, writing in Complete Colorado last month, predicted that smuggled cigarettes, both “casual” and “commercial”, would leap from 12 percent to 36  percent of all those smoked here.  Half would come from seven neighboring states, all with lower excise tax rates, and the other half from more distant states, like Missouri, whose tax is only 17 cents, lowest in the nation.

So go ahead and vote for Amendment 72. The smugglers will be as grateful as all those researchers whose livelihood depends on proving, over and over and over again, that smoking is bad for you.

Longtime Rocky Mountain News political columnist Peter Blake now writes once a week for CompleteColorado.com. Contact him at pblake0705@comcast.net You may re-publish his work at no charge and without further permission; please give full credit to Peter Blake and www.CompleteColorado.com.

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