| a piece of local news that has implications for cigar | | | | Already, Jennifer Granholm--governor of neighboring |
| smokers all over the United States. Yet another state | | | | Michigan--has proposed a huge increase in |
| legislature has noticed the tax-law loophole that has | | | | non-cigarette tobacco to help balance her troubled |
| made cigar smokers so happy over the years--and | | | | state's budget. Under her plan, cigars, snuff and rolling |
| intends to close it. | | | | tobacco would face a doubled tax burden: from |
| Federal and state tax laws have long favored cigar | | | | thirty-two percent, under current law, to sixty-four |
| smokers--perhaps from legislators' inattention, perhaps | | | | percent. And unlike in Ohio, this proposal is coming from |
| because cigars are thought of more avorably, perhaps | | | | a Governor. Granholm suggested a similar measure in |
| from cigar makers' smaller advertising budgets and | | | | 2007, which was killed by the state's |
| lower profile. In any case, cigarettes are more likely to | | | | Republican-dominated Senate. However, that was |
| face high federal and state sales taxes, while cigars | | | | before the current economic crisis. |
| are often exempted from these rules. | | | | This news comes hard on the heels of the first major |
| But an Ohio state representative has proposed a tax | | | | federal-excise-tax increase on tobacco in over ten |
| hike on cigars, chewing tobacco, and other forms of | | | | years. Recent increases in funding for child health care |
| non-cigarette tobacco, which would raise the tax rate | | | | will be paid for, partly, from a relatively large increase in |
| on all of these products from | | | | taxes on cigars, cigarettes, and loose tobacco. |
| seventeen-percent-of-wholesale to the fifty-five | | | | Other cash-strapped states contemplating similar |
| percent that Ohioans already pay on cigarettes. The | | | | measures include Pennsylvania, Arkansas and |
| representative touts possible decreases in Medicare | | | | Kentucky. On the other side of the loophole, |
| spending as a financial benefit of the prospective law | | | | meanwhile, Oregonians may soon face a |
| change. | | | | sixty-cent-per-pack increase on cigarette taxes, with |
| A spokeswoman for Ohio's Democratic governor, Ted | | | | supporters telling newspapers that they're confident |
| Strickland, has already disclaimed the governor's | | | | the measure (also rejected in 2007) will pass this |
| willingness to increase Ohio taxes. (Strickland's current | | | | legislative season. Mississippi lawmakers are similarly |
| budget proposal is free of any such increases, though | | | | confident about their proposed cigarette-tax increase, |
| it does create a number of new fees or fee | | | | which will raise rates from eighteen cents per pack |
| increases.) And since the current proposal wouldn't | | | | (the third-lowest cigarette tax in the nation) to a dollar |
| directly address the state's budgetary | | | | even. The measure has already passed the Mississippi |
| woes--Representative Tyrone Yates, who proposed | | | | House while a more modest increase (to forty-nine |
| the tax increase, says the money should go to | | | | cents) has cleared the Senate; negotiators have until |
| smoking-prevention programs instead--there's a decent | | | | the end of March to broker a deal. Other states with |
| chance that Ohio legislators won't want to sign on. | | | | cigarette tax increases in the works include Utah and |
| But the news underscores the likelihood that, in lean | | | | possibly North Carolina, where polls find a majority of |
| and hungry times, state as well as federal legislators | | | | adults support such an increase. Wisconsin governor |
| will eye new taxes on cigars as a possible source of | | | | Jim Doyle is pushing for a seventy-five cent |
| revenue. Given that most states face a budgetary | | | | increase--little more than a year after a dollar increase |
| crisis that makes the Federal Government's problems | | | | took effect in January 2008. (Doyle's supporters |
| look almost easy--and that cigars are widely seen, | | | | concede that he may be overplaying his hand.) |
| especially by non-smokers, as a luxury item--many | | | | Maybe, when you add it all up, it's still a little |
| legislators will be viewing the gap between cigar and | | | | safer--tax-wise--to smoke cigars after all, loophole or |
| cigarette taxes with a critical eye. | | | | no loophole. It's certainly tastier. |