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States Consider Tax Hikes

NEW HAVEN, Conn. -- At least nine states are considering new "sin taxes" on products ranging from cigarettes and beer to candy in order to bolster budgets recently battered by the recession.

Alcohol tax increases have been proposed in Alaska, Connecticut, Hawaii, Kansas, Nebraska, New Mexico, Oregon, South Carolina and Tennessee.

Just three weeks after approving a 61-cent-per-pack cigarette tax increase, Connecticut lawmakers are considering a plan to double taxes on alcohol and impose new taxes on sales of candy to help close a two-year, $1-billion budget gap, according to the London (Conn.) Times.

The state's 6-percent sales tax may be extended to other "optional" items such as yarn and seeds.

Connecticut's 61-cent cigarette tax hike will take effect on April 3, raising the tax to $1.11 and making it the third highest in the nation. Peter Cressy, president of the Distilled Spirits Council of the United States, has argued that doubling the alcohol tax could cost as much $500,000 in liquor revenue and eliminate as many as 2,000 jobs.

In Hawaii, the state Senate approved a 50-percent increase in the state liquor tax, only half the increase proposed by Gov. Ben Cayetano.

New Mexico, South Carolina and Kansas are expected to vote on "sin" tax increases in May. California, additionally, is considering a tax on soda as a means to fight childhood obesity.
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