Saturday, April 3, 2010
© Copyright 2014
Gwinnett Daily Post
Increasing the state's tobacco tax, contrary to Pat Swan's op-ed ("Tobacco tax increase will improve state's health, bottom line," March 28, Page 11A) is not only flawed in its logic, it is dangerous. A tobacco tax might sound good to nonsmokers, but in practice it ignores the basic principles of sound tax policy and causes many unintended consequences for the state's budget and economy.
As we have seen time and again, targeted tax increases on products such as soda, tobacco and alcohol disproportionately burden low-income taxpayers, punish local businesses and often bring in less revenue than predicted.
In particular, tobacco taxes would harm local small businesses such as convenience stores and gas stations because the $1 per pack increase would make it the highest in the Southeast, thereby causing an increase in cross-border purchasing and smuggling.
Taxpayers need to be wary: When unreliable tax revenue streams dry up and government spending continues to swell, the legislature will be back for more money from all Georgia taxpayers.
Nothdurft is the budget and tax legislative specialist for The Heartland Institute.