Proposed cigarette tax, a double-edged sword?
2:59 p.m. Monday, December 3, 2007
In Kansas, the cigarette tax is no small change. The little green insignia on the bottom of every pack brings in about a $115 million every year.
In a quest to cut down on smoking, the Kansas Health Policy Authority wants state lawmakers to raise the cigarette tax. The group reports that an extra 50 cents a pack could mean an extra $50 million in revenue.
"It's a triple win. You are improving health outcomes, you are saving the state dollars, and at the same time you are bringing in additional dollars to improve the health in your state," said Kansas Health Policy Authority Executive Director Marcia Neilson.
But some Kansans -- such as convenience store owners -- think smokers and their suppliers are being asked to pay too much.
Tax breakdown
- For an average pack of cigarettes, Kansans pay 79 cents to the state.
- 39 cents to the federal government
- 32 cents in sales tax
- Big tobacco companies tack on another 47 cents.
"You only got 20 percent of the people doing it, and you are going after 20 percent to fulfill a bigger problem. Is that fair?" said Tom Palace, who lobbies for convenience stores.
For an average pack of cigarettes, Kansans pay 79 cents to the state, another 39 cents to the federal government and 32 cents in sales tax. Big tobacco companies say they tack on 47 cents to cover the cost of state lawsuit settlements. In all, that's 42 percent of the total cost for one pack of smokes.
Kansas' 79 cent tax is far above Missouri's, the second lowest in the country. A 50-cent raise to the cost, and the Sunflower State's cigs becomes much more expansive than all its neighbors.
"And, Missouri is happy to keep that 17-cent tax because they are going to increase their profits where Kansas will eventually lose profits," Palace said. "When you start to reduce your smokers or your profit centers, what happens to that government agency. What happens to their budget, how do they fund it?"
Cigarette taxes in the Midwest
- Kansas: 79 cents
- Nebraska: 64 cents
- Colorado: 84 cents
- Missouri: 17 cents
- Oklahoma: $1.03
Source: The Kansas Department of Revenue
"First of all, when you increase the tobacco tax, there are some people who quit smoking, but unfortunately you never get it down to zero. Think of what a fabulous thing it would be if we could. Think of all the money we could save on health care costs, if we could. But in fact, it is not the reality. It is not the reality in Kansas or any other state," Neilson said.
In the past three years, 23 states have increased their cigarette taxes, and Congress is looking to boost the federal tax by another 61 cents to help cover the cost of children's health care.
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