1stTimeCaller
12/27/2006, 05:14 AM
You're about to pay exactly $1 more per pack on your smokes in a week -
http://www.chron.com/disp/story.mpl/front/4425102.html
Dec. 25, 2006, 1:18AM
$1-a-pack hike in cigarette tax a few days away
Advocates hope increase will keep more from lighting up; store owners fear dip in profits
By GARY SCHARRER
Copyright 2006 Houston Chronicle Austin Bureau
HEALTH COSTS
The U.S. Centers for Disease Control and Prevention estimates that smoking-caused health costs total $10.28 per pack sold and consumed in the U.S.
HOW WE STACK UP
Cigarette excise taxes
per pack:
•Texas $1.41
Neighboring states:
•Oklahoma $1.03
•New Mexico 91 cents
•Arkansas 59 cents
•Louisiana 36 cents
AUSTIN — Texas smokers will pay significantly more for cigarettes starting Jan. 1 when the excise tax increases by $1 a pack in a move that health experts hope will discourage folks, especially teens, from lighting up.
The state tax increase — from 41 cents to $1.41 per pack — also will help pay for school property tax cuts.
Some smokers say legislators went too far, while the convenience store industry worries that the steep price increase will lead to more black market sales and cut into legitimate sales of tobacco products.
But others argue that health issues should trump all else.
"The cigarette tax, more than anything, will have the most significant impact in stopping kids from ever starting smoking, because they are so price-sensitive," said James Gray, a spokesman for the American Cancer Society, Texas chapter.
The Texas tax increase will push the price of a single pack of cigarettes to around $4.50.
An estimated 143,000 Texas adults will quit smoking, and a projected 284,000 teens never will start smoking as a result of the tax increase, Gray said, citing various studies. About 3.3 million Texans currently smoke, based on a 20 percent adult smoking rate in the state, he said.
Texas taxpayers spend about $1.5 billion a year, Gray said, for treating tobacco-related illness in the Medicaid program for low-income people.
'A terrible shock'
Most smokers don't realize they soon will be paying considerably more for their habit, said longtime smoker Gertrude Lizakowski, of San Antonio.
"They are going to get a terrible shock when Jan. 1 comes around," she said.
A one-pack-a-day smoker will pay nearly $50 a month in tobacco excise and sales taxes, Lizakowski said.
"That's pretty heavy for smokers in Texas," she said. "I think it's unfair, because it targets one class of people."
Lizakowski has been smoking for 66 years and does not plan to stop now.
"Am I going to quit just because cigarettes go up $10 a carton? No. Why should I? It's an addiction. It's a withdrawal thing just like drugs. And it's hard on your nerves," she said about quitting.
She recently stocked up with seven cartons to save herself $70 in new taxes.
Teenagers and smoking
Lawmakers declined to increase cigarette taxes during a tight budget year in 2003 when they cut spending on the Children's Health Insurance Program.
But they could not resist raising cigarette taxes in the spring when searching for more revenue to cut property taxes. The $1-per-pack increase should generate roughly $700 million a year more in taxes, according to projections by the comptroller's office: $682.6 million in fiscal 2008 and $722.8 million for fiscal 2009.
All of that new tax revenue will go to reduce property taxes. But Senate Health and Human Services Chairwoman Jane Nelson, R-Lewisville, said she will renew efforts in the upcoming legislative session to allocate a modest portion for smoking prevention programs aimed at teenagers.
"As a mother and a grandmother, it's very important for me that we stop a whole other generation of kids from being hooked on tobacco," she said. "The cost is just too great."
She said she wants lawmakers to set aside 5 percent of the new tobacco tax revenue for anti-smoking programs.
"Every month you can keep a person past 14 from smoking, chances are they won't become a smoker," Nelson said.
Texas' cigarette tax rate will leave 15 other states with higher taxes on cigarettes. New Jersey has the highest state tax at $2.58 per pack. But some communities also impose local taxes, creating a combined state-local tax rate of $3.66 per pack in Chicago, for example. Anchorage has a tax of $3.10 per pack, and New York City taxes $3 per pack.
Tobacco sellers
Convenience stores are bracing for a financial setback, as cigarettes represent 34 percent of in-store sales, said Chris Newton, president of the Texas Petroleum Marketers and Convenience Store Association.
About 14,000 convenience stores in Texas will face fewer sales as shoppers forgo stops for cigarettes, Newton said.
"Consumers who choose not to stop by a convenience store to purchase cigarettes means that those same consumers will also not be making other purchases they traditionally make when purchasing cigarettes, such as soft drinks or food products," he said. "The economic impact of these consumers' decisions will be especially felt in Texas' border cities like El Paso and Texarkana."
El Pasoans will save $5 in excise taxes on every carton by shopping in neighboring New Mexico, while Texarkana shoppers could save more than $8 per carton in Arkansas.
"The impact will be disproportionate along those areas of Texas that border other states, because the consumer will readily cross the border to save that much on cigarette taxes," Newton said.
He said he fears that more smokers will turn to the Internet for tax-free cigarettes, Indian tribal retailers or black market cigarettes.
The convenience store industry will urge Texas lawmakers and the comptroller's office to beef up enforcement efforts.
"Our association has encouraged its members to promptly report any signs of illicit activities or other tax-evasion schemes to the comptroller's office or their local law enforcement authorities," Newton said.
What happens when everyone quits smoking? Where do the politicians get their money from then? Do they cut programs or raise taxes?
http://www.chron.com/disp/story.mpl/front/4425102.html
Dec. 25, 2006, 1:18AM
$1-a-pack hike in cigarette tax a few days away
Advocates hope increase will keep more from lighting up; store owners fear dip in profits
By GARY SCHARRER
Copyright 2006 Houston Chronicle Austin Bureau
HEALTH COSTS
The U.S. Centers for Disease Control and Prevention estimates that smoking-caused health costs total $10.28 per pack sold and consumed in the U.S.
HOW WE STACK UP
Cigarette excise taxes
per pack:
•Texas $1.41
Neighboring states:
•Oklahoma $1.03
•New Mexico 91 cents
•Arkansas 59 cents
•Louisiana 36 cents
AUSTIN — Texas smokers will pay significantly more for cigarettes starting Jan. 1 when the excise tax increases by $1 a pack in a move that health experts hope will discourage folks, especially teens, from lighting up.
The state tax increase — from 41 cents to $1.41 per pack — also will help pay for school property tax cuts.
Some smokers say legislators went too far, while the convenience store industry worries that the steep price increase will lead to more black market sales and cut into legitimate sales of tobacco products.
But others argue that health issues should trump all else.
"The cigarette tax, more than anything, will have the most significant impact in stopping kids from ever starting smoking, because they are so price-sensitive," said James Gray, a spokesman for the American Cancer Society, Texas chapter.
The Texas tax increase will push the price of a single pack of cigarettes to around $4.50.
An estimated 143,000 Texas adults will quit smoking, and a projected 284,000 teens never will start smoking as a result of the tax increase, Gray said, citing various studies. About 3.3 million Texans currently smoke, based on a 20 percent adult smoking rate in the state, he said.
Texas taxpayers spend about $1.5 billion a year, Gray said, for treating tobacco-related illness in the Medicaid program for low-income people.
'A terrible shock'
Most smokers don't realize they soon will be paying considerably more for their habit, said longtime smoker Gertrude Lizakowski, of San Antonio.
"They are going to get a terrible shock when Jan. 1 comes around," she said.
A one-pack-a-day smoker will pay nearly $50 a month in tobacco excise and sales taxes, Lizakowski said.
"That's pretty heavy for smokers in Texas," she said. "I think it's unfair, because it targets one class of people."
Lizakowski has been smoking for 66 years and does not plan to stop now.
"Am I going to quit just because cigarettes go up $10 a carton? No. Why should I? It's an addiction. It's a withdrawal thing just like drugs. And it's hard on your nerves," she said about quitting.
She recently stocked up with seven cartons to save herself $70 in new taxes.
Teenagers and smoking
Lawmakers declined to increase cigarette taxes during a tight budget year in 2003 when they cut spending on the Children's Health Insurance Program.
But they could not resist raising cigarette taxes in the spring when searching for more revenue to cut property taxes. The $1-per-pack increase should generate roughly $700 million a year more in taxes, according to projections by the comptroller's office: $682.6 million in fiscal 2008 and $722.8 million for fiscal 2009.
All of that new tax revenue will go to reduce property taxes. But Senate Health and Human Services Chairwoman Jane Nelson, R-Lewisville, said she will renew efforts in the upcoming legislative session to allocate a modest portion for smoking prevention programs aimed at teenagers.
"As a mother and a grandmother, it's very important for me that we stop a whole other generation of kids from being hooked on tobacco," she said. "The cost is just too great."
She said she wants lawmakers to set aside 5 percent of the new tobacco tax revenue for anti-smoking programs.
"Every month you can keep a person past 14 from smoking, chances are they won't become a smoker," Nelson said.
Texas' cigarette tax rate will leave 15 other states with higher taxes on cigarettes. New Jersey has the highest state tax at $2.58 per pack. But some communities also impose local taxes, creating a combined state-local tax rate of $3.66 per pack in Chicago, for example. Anchorage has a tax of $3.10 per pack, and New York City taxes $3 per pack.
Tobacco sellers
Convenience stores are bracing for a financial setback, as cigarettes represent 34 percent of in-store sales, said Chris Newton, president of the Texas Petroleum Marketers and Convenience Store Association.
About 14,000 convenience stores in Texas will face fewer sales as shoppers forgo stops for cigarettes, Newton said.
"Consumers who choose not to stop by a convenience store to purchase cigarettes means that those same consumers will also not be making other purchases they traditionally make when purchasing cigarettes, such as soft drinks or food products," he said. "The economic impact of these consumers' decisions will be especially felt in Texas' border cities like El Paso and Texarkana."
El Pasoans will save $5 in excise taxes on every carton by shopping in neighboring New Mexico, while Texarkana shoppers could save more than $8 per carton in Arkansas.
"The impact will be disproportionate along those areas of Texas that border other states, because the consumer will readily cross the border to save that much on cigarette taxes," Newton said.
He said he fears that more smokers will turn to the Internet for tax-free cigarettes, Indian tribal retailers or black market cigarettes.
The convenience store industry will urge Texas lawmakers and the comptroller's office to beef up enforcement efforts.
"Our association has encouraged its members to promptly report any signs of illicit activities or other tax-evasion schemes to the comptroller's office or their local law enforcement authorities," Newton said.
What happens when everyone quits smoking? Where do the politicians get their money from then? Do they cut programs or raise taxes?