Texas to Seek Tobacco Tax Increase
AUSTIN, Texas -- Facing a potential $5 billion budget shortfall, State Rep. Steve Wolens (D-Dallas), has proposed raising the cigarette tax by 50 cents per pack with proceeds going to fund law enforcement and firefighters. Currently, the state cigarette tax is 41 cents and hasn't been raised since 1990, reports the Corpus Christi Caller-Times
"It should not have taken recent events to remind us just how vital police, firefighters and sheriffs are to our communities," Wolens said. "These public servants lay their lives on the line each and every day in order to protect us. Given the sacrifices they and their families make and the dangers inherent in their work, police officers, sheriffs and firefighters deserve to make competitive wages."
Nationwide, the average cigarette tax per pack is 60 cents. Wolens estimates that a 50-cent increase per pack could raise $500 million per year or $1 billion for the next two-year budget cycle.
One tobacco company representative called the proposed tax increase "tax profiling."
"We understand the need for funding police and the fire department, but to single out adult smokers that only comprise 22 percent of population, to fund something that helps the entire state, that is funding profiling," said David Howard, spokesman for Winston-Salem, N.C.-based R.J. Reynolds Tobacco Co.
While tax revenue might initially blossom after the tax increase, it will eventually drop off significantly as smokers buy cigarettes on Indian reserves, via the Internet or in states that have lower taxes, Howard said. Nationwide, 47 percent of the price of a pack of cigarettes is taxes.
In Texas, tax revenue on a carton of cigarettes is equivalent to taxes on 36 six-packs of beer or taxes on 101 bottles of wine, Howard said. "Adult smokers, through taxes, are already paying their fair share," he said. "It's going back to tax profiling. It's the politically correct thing to do. It just doesn't seem right."
ABOVE: Texas Rep. Steve Wolens
"It should not have taken recent events to remind us just how vital police, firefighters and sheriffs are to our communities," Wolens said. "These public servants lay their lives on the line each and every day in order to protect us. Given the sacrifices they and their families make and the dangers inherent in their work, police officers, sheriffs and firefighters deserve to make competitive wages."
Nationwide, the average cigarette tax per pack is 60 cents. Wolens estimates that a 50-cent increase per pack could raise $500 million per year or $1 billion for the next two-year budget cycle.
One tobacco company representative called the proposed tax increase "tax profiling."
"We understand the need for funding police and the fire department, but to single out adult smokers that only comprise 22 percent of population, to fund something that helps the entire state, that is funding profiling," said David Howard, spokesman for Winston-Salem, N.C.-based R.J. Reynolds Tobacco Co.
While tax revenue might initially blossom after the tax increase, it will eventually drop off significantly as smokers buy cigarettes on Indian reserves, via the Internet or in states that have lower taxes, Howard said. Nationwide, 47 percent of the price of a pack of cigarettes is taxes.
In Texas, tax revenue on a carton of cigarettes is equivalent to taxes on 36 six-packs of beer or taxes on 101 bottles of wine, Howard said. "Adult smokers, through taxes, are already paying their fair share," he said. "It's going back to tax profiling. It's the politically correct thing to do. It just doesn't seem right."
ABOVE: Texas Rep. Steve Wolens