A proposed cigarette tax hike would cost South Carolina’s economy nearly a quarter billion dollars and over 4,000 jobs – including over 1,300 retail jobs typically held by low-income citizens – a study released today by the S.C. Policy Council reports.
In the latest blow to befall a rapidly-disintegrating pro-tax hike coalition, the Policy Council study is chock full of damaging data about the proposed 50-cent tax hike – which would raise our state’s cigarette tax well above current rates in our neighboring states of Georgia (37 cents) and North Carolina (35 cents), as well as regional peers Virginia (30 cents) and Florida (33.9 cents).
Plus, these increases are on top of the largest-ever increase in the federal cigarette tax – a 62-cent hike that just went into effect last month.
“A cigarette tax increase will affect much more than cigarette sales,” the report states. “Businesses along the entire supply chain for a variety of products will suffer a reduction in sales and profits. In turn, these businesses will be forced to reduce employment and investment expenditures. Tax revenues at the state and local levels will decline as a result.”
In bad news for the bill’s big government backers, like House Speaker Bobby Harrell and Senate Finance Chairman Hugh Leatherman, the Policy Council report shows that revenue estimates from tax increases in other states have fallen well short of their anticipated mark – 35% below projections in Georgia and 16% below projections in Virginia.
Ruh-roh. We can literally hear RINOcrats pulling their support.
“Relying on a declining revenue source to fund recurring expenses is a recipe for future tax increases,” the report concluded.
No doubt. In fact, we hit on this theme extensively in two previous stories about the tax hike (here and here).
Of course, since then the original plan to spend this money on “low-income families” has been scrapped, with lawmakers now looking to put the money into a “trust fund.”
Oh and are you ready for this?
According to La Liberdad (a.k.a. The Greenville News), “lawmakers would decide later how the funds would be spent.”
By Ben May 7, 2009 at 4:19 pm
Who is that in this picture?
By Page May 7, 2009 at 4:41 pm
The Policy Council is a joke. Nobody outside of Sanford’s sphere of ignorance cares about the fiction they write.
By Sic Willie May 7, 2009 at 5:00 pm
1. Dear Ben,
The answer to your question is “a beautiful woman.”
2. Dear Page,
Like Micheal Stipe sang, “I’m pushing an elephant up the stairs.”
-W
By baker May 7, 2009 at 5:37 pm
I don’t put a lot of stock in “reports” from the Policy Council. After all, they’re the ones who pushed the bogus “report” suggesting that less than half of public school money goes toward teaching kids (they excluded salaries for librarians and guidance counselors, for example).
But, in truth, it seems like both sides of so many issues come up with these studies. Whether liberal or conservative, seems like there’s always some study claiming that, oh, “20,000 jobs will be lost or created,” or “such-and-such event will generate $574,295.74 for the local economy” or “such-and-such social problem costs society $4 million a year” or whatever. It’s often economists with impressive credentials who come up with this stuff, though it’s usually through whatever bias they have (big government vs. small government, free market libertarianism vs. regulation, etc.).
Anyway, I guess I’m saying that I think these sorts of predictions are probably awfully difficult. It would be interesting to look back at some of these types of “reports” and see how accurate they were or were not.
By JR May 7, 2009 at 7:35 pm
How about how much our state will save in the long run since it is well known that for every 10 cent increase in the sales tax, will result in a seven percent decrease in teen smoking?? Cigarettes cost the state MILLIONS in state health care dollars . How do you factor that into the lost revenue equation?
By Elmo May 7, 2009 at 8:43 pm
Hey I have a question. Can food stamps be used to buy cigarettes?
By w May 8, 2009 at 7:27 am
Wait a sec…..
didnt those folks say we will lose some 35,000 private sector jobs by taking the stimulus and now another 4,000 or so by hiking the tax on cigs? Good God talk about idiotic.
The problem with the policy council is that they prevent themselves from being relevant by throwing ridiculous numbers around that cannot in any way corroborate, other than some pie in the sky unrealistic “national economist” projections that nobody buys.
Why is the argument not that paying for a recurring need with a variable income source extremely dangerous and exposing the taxpayers to a great liability? or that we are spending millions of tax dollars on ads to get kids and others to quit smoking yet secretly atatching a tax paying for critical healthcare services and simultaneously praying that more people smoke more frequently?
Simply idiotic.
By Cadetsuperintendent May 8, 2009 at 7:31 am
The report neglected to mention that raising the
tax would also cause the earth’s axis to shift
and probably lead to unpredictable weather patterns.
Not to mention the anticipated effect upon the
quality of SEC football over the next few years.
By StupidShouldHurtMore (SSHM) May 8, 2009 at 8:52 am
What sort of logic is this:
“Relying on a declining revenue source to fund recurring expenses is a recipe for future tax increases”
If you really get right down to it – EVERY source of revenue is a declining source of revenue. Think about it. Applying the logic of the SC Libertarian Policy Council, no one should be taxed as we are ALL declining sources of revenue (e.g., we all eventually stop paying taxes at some point).
- SSHM
By Ron May 8, 2009 at 7:58 pm
Nice article Will,
The bottom line in my view is that the tax on smokes proposal is justified so that they can add this program and that program. SIMPLY WOULD MAKE GOV BIGGER!!! NO MORE TAXES!! THROW THESE BUMS OUT OF OFFICE IN 010. WHATEVER HAPPENED TO THE TAXPAYER PLEDGE MOST OF THESE BOZOS SIGNED TO GET ELECTED??
By Cooter Brown May 9, 2009 at 6:26 pm
If’n dey is taxin fir revenue, dey’s exploitin’ nicotine addiction witch sounds a bit sleazy. If dey is a tryin’ to git folks to quit, den day is shootin’ demselves in da feets ’cause da monie will dry up as folks stop a smokin. Can anie one ‘spain dis to old Cooter?
By Cooter Brown May 9, 2009 at 6:26 pm
Does i now I got to buy mi smokes on da blak market or strat a rollin’ mi own? I rekon I can grow a little ‘backey in my bean field or I could jest quit… naw! Fite da power! If you got ‘em, smoke ‘em… smoke ‘em fer liberty!!!
By Cooter Brown May 9, 2009 at 6:29 pm
I noticed that my stuff is not being posted– are you banning me?
By picman coz May 6, 2010 at 9:29 pm
I work in a cigarette store on nc/sc border. The new tax will close our store, we have already been told management any tax over $2 will kill our sales. We employ senior citizens mostly who cannot find other jobs due to our age. When this tax takes effect we will all go to the food stamp office together in SC, and are looking at every other welfare program available to us.
Tax and spend, tax and spend.