7 Reasons Why a Cigarette Tax is Bad for Wisconsin

WISGOP presents 7 solid reasons why the cigarette excise tax is bad for Wisconsin.

1. Cigarette excise tax rate increases do not produce the desired revenues. A 42.0 percent increase in the cigarette excise tax rate would result in only a 6.8 percent increase ($50.5 million) of total tax revenues in Fiscal Year 2010.

2. Cigarette excise taxes are an unreliable, declining and unstable funding source. Smoking bans, a national trend to stop smoking, product substitution, smuggling, and cross border sales are the major factors in making it difficult to accurately project cigarette excise tax revenues.

3. Raising cigarette excise taxes is bad public policy. Structural deficits, such as those facing Wisconsin, cannot be solved by relying on a declining tax source to fund services whose costs continue to increase.

4. Cigarette excise taxes target low-income consumers and are regressive. Such taxes single out those least able to afford to pay.

5. Smokers have options: Border Sales, the Internet, military bases and Native-American owned retail outlets. While the State of Michigan has a higher state excise tax rate, Wisconsin smokers can travel to the remaining Border States to obtain lower taxed cigarettes.

6. Cigarette excise tax increases have a negative effect on Wisconsin retailers. An increase will lead to lower sales, therefore reducing their profits.

7. Higher cigarette excise taxes result in increased crime. Various studies and reports illustrate the relationship between high tax rates and increased crime.

Full report here.