Smokers may pay for Kasich's tax cut

Overwhelming majority of data show that most of Ohio’s smokers are poor.
TNS Regional News
Mar 11, 2014

 

About 77 percent of Ohioans don’t smoke.

So if the income-tax cut Gov. John Kasich unveils on Tuesday is paid for in part by a significant increase in the state’s cigarette tax, as expected, roughly three-quarters of Ohioans probably would support it.

But what about the 23 percent who smoke?

“There are certain activities we all do in life that if we do them, you know there is going to be increased costs. This is one of them,” said state Rep. Jeff McClain, R-Upper Sandusky, who will carry Kasich’s legislative agenda in the House, including the tax plan.

The Dispatch reported yesterday that a framework has emerged for Kasich to pay for an income-tax cut that would reduce Ohio’s top rate below 5 percent. It includes potentially increasing the state’s $1.25 tax on a pack of cigarettes, raising the state’s primary tax on businesses and implementing a severance tax on shale oil and gas drillers.

Neither Kasich nor his team has confirmed what’s in the plan. But revenue boosters such as those could draw opposition from the state legislators and key supporters who back the idea of lowering the income tax but don’t like the method of paying for it — even though most Ohioans don’t smoke and the cigarette tax has not been increased since 2005.

Ohio businesses selling tobacco, especially in communities near the state line, fear losing customers.

Also, the overwhelming majority of data show that most of Ohio’s smokers are poor. They pay little or no income tax, so they would pay more for their smokes but benefit little from the proposed income-tax cut.

“It’s bad news for poor people, that’s for sure,” said Jack Frech, director of the Athens County Department of Job and Family Services, which is in one of Ohio’s poorest areas. “Let me say, no one should be smoking cigarettes. It’s unhealthy, and no one should smoke. But poor people are not going to be able to turn on a dime and stop smoking because (the state) raises the prices.”

The state brings in more than $770 million a year from its cigarette tax. Boosting that tax by $1 per pack, as some sources have indicated Kasich might propose, would generate an extra $450 million in revenue in the first year and $344 million in the second, according to figures provided by the Ohio Department of Taxation. The first year would provide more because the existing cigarette inventory would be subject to a one-time tax.

Ohio’s cigarette-tax rate is the 29th-most expensive in the U.S. The American Lung Association gives Ohio’s cigarette tax a “D” grade, and experts say raising the price of cigarettes is one of the most effective ways to get people to quit smoking or prevent them from starting the habit.

Weaning people off smoking might sound counterintuitive if a tax cut was structured in part on revenue generated from cigarette sales. But during his State of the State speech last month, the governor pledged about $35 million for smoking cessation and enforcement of Ohio’s statewide smoking ban.

“Ideally, the money generated from a higher tax would be invested back into cessation programs to help people quit,” said Micah Berman, assistant professor of public health and law at Ohio State University. “If you are increasing the tax, that is going to increase the number of people who want to quit and try to quit, so you would want to have the resources available to help them.”

Ohio last raised its cigarette tax in 2005, the same year it began to implement the commercial-activity tax on businesses’ gross receipts. Nine years later, Kasich might propose not only an increase in the cigarette tax but also a small increase in the commercial-activity tax; that could draw the ire of the business community.

Beth Wymer of the Ohio Wholesale Marketers Association said her members would have concerns if either tax is raised to fund an income-tax cut. She said that a higher tax on cigarettes could mean a loss of customers to other states. Michigan and Pennsylvania have a higher cigarette tax than Ohio, but should Ohio’s tax rise by $1 per pack, it would be higher than that of all the state’s neighbors.

“When retailers start losing business to other states, it’s not just cigarettes,” Wymer said. “ It’s the bag of chips, the six-pack of beer, pop — even motor fuel. Then that hurts not only the retailer, but the wholesaler, too.”

———

Joe Vardon - The Columbus Dispatch, Ohio (MCT). Dispatch Reporter Jim Siegel contributed to this story.

©2014 The Columbus Dispatch (Columbus, Ohio)

Visit The Columbus Dispatch (Columbus, Ohio) at www.dispatch.com

Distributed by MCT Information Services

Comments

JACKEL

Well, let's hear some alternatives? Some one has to pay for all our services we expect !

IDK

I smoke. I am not poor. I have no children so I pay more income taxes than most. You can't generalize and say people who smoke are poor and don't pay income taxes. I know many people that smoke and aren't poor. Anyways...order your stuff online and roll your own like I do. Much cheaper. Until the government starts banning that also, which they do in some states already.

uncommoncents

How can smokers be poor? With the price of cigarettes, only the rich could afford such a luxury to start with.

truckin

I agree
I realize it's a choice thing and i don't want to cross that line.. but when you don't 100% provide for your family... yet have money for smokes??? i really believe you ought to have to undergo a nicotine (and drug ) test. before benefits provided

betrump

And I think you should be required to take an IQ test prior to posting on the Reflector. The silence would be deafening.

Dr. Information

I see plenty of poor people lighting up all the time around this town. Dirty clothes, kids all ragged looking, parents looking like they haven't showered in weeks, yet they got those cigs.

JMOP's picture
JMOP

I agree. If it's a republican plan, somehow the media has to throw in how it will effect the poor more. Smoking is a choice, don't wanna pay for the tax, don't buy it.

former local

Its not a choice once you start! Nicotine is addictive and should be regulated like drugs, but tobacco companies give too much money to politicians for that to happen

Dr. Information

Its not a choice once you start? Any facts on that? Food is addictive, not working out is addictive, caffeine is addictive and people make CHOICES to change that daily.

Any more excuses for those who have no choice but to smoke today?

JMOP's picture
JMOP

Oh brother Former local.....just because it's addictive, doesn't mean it's not a choice. Who choose to lit it up the very first time they stuck that cig in their mouth?
There's only two things in life that you have to do, die and pay taxes.

Kottage Kat

Perhaps they should look at increasing the tax on liquor.
No vehicle accidents due to nicotine.
Has anyone been stopped by LE for DUI of Nicotine?
Both can kill, both are a choice. Fair taxation.

Kottage Kat

When was the last time taxes were raised on liquor?
Please don't tell me look it up. No computer.
Thank you

buckeye15

If you are capable of surfing to the Reflector website and posting comments, you are capable of research on your phone, or whatever. You are welcome.

Kottage Kat

Thank you for your kindness. Always appreciated.

nakedtruth

I agree kottage kat. Why don't they tax alcohol, chew, unhealthy food, fast food and candy. Better yet, why don't we tax people per pound each year, bet they would lose weight. I venture to say that obesity is an underlying cause for more health problem, disability claims and welfare use than any smoker or drinker. My last thought, legalize and tax marijuana. Let the stoners pay some taxes and save tax money on convicting them. Stoners aren't criminals, they just don't have the motivation to commit crime.

JMOP's picture
JMOP

There is a tax on chew (tobacco) and liquor.

nakedtruth

Sorry stoners, but all smokers should pay since we are the dirty evil society:)

Contango

Taxes should be used strictly as a revenue source.

Consumption taxes should be based on a flat rate and not used to influence behavior.

The marginal state income tax rate on individual and businesses should be: 0%.

nakedtruth

Valid point Contango. This used to be a free country. Where has all the revenue for the state lottery and the casinos gone? You always hear about the highway dept, however ther is a gas tax that is used for odot. The state government should live within it's means and stop balancing their budget with kasucks crazy ideology. Not only has he cut LG funding which cut local emergency and law enforcement but he also reduced the time felons (I.e heroin junkies) would be incarcerated along with sending higher felony convictions back to the county jails. He is the one everyone should thank for losing local services and the ever rising local taxes.

Contango

Re: "losing local services and the ever rising local taxes."

Your point that the state govt. "should live within it's means," is also valid of local.

The Lottery; the stupid tax?

See how much money that scam directly pulls out of the local economy:

http://www.dispatch.com/content/...

jacksonbrowne

Let's continue to give people the Snap card so they can spend their money on smokes. Yes, good plan. (sarcasim)

KURTje

Sure. Up the tax on cigs, booze, auto plates, gas, etc. God forbid we the people vote for a flat tax & make ALL elected officials take pay & health care cuts.