Taxes and Tobacco

Gov. Jim Doyle is dishonest.

Doyle lied through his teeth: "Going forward, my mind will be open to every solution -- except one. We should not -- we must not -- and I will not -- raise taxes."

What a crock!

He never met a tax he didn't like. Doyle is still proposing a 75 cent per pack cigarette tax hike, to encourage smokers to quit while also addressing Wisconsin's budget problems.

Taxing tobacco won't solve budget shortfalls. As smokers quit, the tax revenue will be snuffed out.

New federal legislation promises to speed the decrease in state tax revenue from tobacco.

From Reuters:

Legislation recently cleared by the House of Representatives to give the Food and Drug Administration power over cigarettes would save the federal government some money but seriously dent tax revenues collected by states, a congressional report said on Tuesday.

The bill, which passed earlier this month, would also cost the multibillion-dollar tobacco industry $235 million in 2010 and more than $500 million a year by 2013, the Congressional Budget Office said.

It would save the federal government $5 million over five years and $2 million over 10 years, in part by reducing healthcare costs, the CBO estimated.

But state and local governments, which collected about $19 billion in 2008 from taxes on tobacco products, would lose more than $1 billion from 2010 to 2014.

"The amount of tax revenues and settlement funds collected by state and local governments would decline as a result of the federal regulations authorized by this legislation because of lower consumption of tobacco products," the report said.

Clearly, taxes on tobacco products aren't the way to increase revenue.