Kill the Goose

In an op-ed piece published by the Herald-Leader, Thomas A. Briant, executive director of the National Association of Tobacco Outlets in Minneapolis, whines that “a tax increase of any kind is the last thing Kentuckians need right now”.

Of course he means tobacco tax increase. Briant continues:

Beshear and Kentucky's legislators need to look beyond the state's borders to understand that increasing the cigarette tax will likely result in killing the goose that lays the golden eggs.

His argument is this:

The explanation for this phenomenon is quite simple. Smokers don't necessarily stop smoking, but they drive across the border to another state with lower taxes, order cigarettes online to escape any state cigarette tax or buy from black market dealers

His explanation is a lie. Briant sites no studies, no facts, no numbers his explanation is a total fabrication.

From the Campaign for Tobacco Free Kids:

In every single state that has significantly raised its cigarette tax rate, pack sales have gone down sharply. While some of the decline in pack sales comes from interstate smuggling and from smokers avoiding in-state purchases and going to other lower-tax states or to the Internet to buy their cigarette, it is clear that reduced consumption from smokers quitting and cutting back plays a more powerful role. As shown in more detail, below, nationwide data – which counts both legal in-state purchases and the vast majority of packs purchased through cross-border, Internet, or smuggled sales – shows that overall packs sales go down as state cigarette tax increases push up the average national price.

Here is the real truth about raising the cigarette tax from Phillip Morris:

Of all the concerns, there is one - taxation - that alarms us the most. While marketing restrictions and public and passive smoking [restrictions] do depress volume, in our experience taxation depresses it much more severely. Our concern for taxation is, therefore, central to our thinking . . . .

You want to talk dollars and cents then try these numbers:

Annual health care costs in Kentucky directly caused by smoking - $1.50 billion

Portion covered by the state Medicaid program - $487 million

Residents' state & federal tax burden from smoking-caused government expenditures - $602 per household

Smoking-caused productivity losses in Kentucky - $2.13 billion

Unlike Mr. Briant who pulls generalities out of thin air, the information from the Campaign for Tobacco Free Kids is backed by research; here is the source information for most of it from the Center for Disease Control.

So I say kill the damn goose. Our kids, our health and our overtaxed wallets are going to be a lot better off when it’s dead.