Minnesotans support taxing smokers to close budget gap

Categories: Taxes

Thumbnail image for cigarettesmoking.jpg
More than half the survey respondents would support increased cigarette prices.
​If the stress from thinking about Minnesota's budget deficit makes you think about lighting up a smoke, think again. Nearly 60 percent of Minnesotans would support increasing cigarette state taxes on tobacco to help solve the state's looming $5 billion budget deficit.

Those respondents supporting a tax increase weren't thinking in small numbers: 70 percent of those who favored an increase would approve of raising cigarette prices by up to $1.50.

The Minnesota Department of Revenue projected that an increase of $1.50 per pack would add $400 million to state revenue over the next biennium. That calculation might be a bit rushed, as only around 40 percent of all respondents favored an increase that big. Still, the numbers look bleak for smokers.

The survey of 625 Minnesota residents was conducted earlier this month, as the threat of a state government shutdown became more and more likely each day. The survey's sponsor, Raise it for Health, is a single-issue advocacy group funded by health care providers, including Blue Cross and Blue Shield of Minnesota, and nonprofits like the American Cancer Society.

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Minnesota's smoking rate decreased in the last decade, but a $1.50 per pack increase could still bring in $400 milion in revenue.

Minnesota's smoking habits curbed severely in the last decade, from 22 percent of the state smoking in 1999 down to 16 percent in 2010. That decline was a decisive factor in getting the Twin Cities named the healthiest metro in the country in May. But as the number of smokers dropped, smokeless tobacco became more popular.

"Cheap tobacco products aren't good for anyone, and higher tobacco prices are a proven and effective way to keep youth from ever starting to smoke and to make it easier for more people to quit," says Matt Schaefer, the American Cancer Society's lobbyist.

But what Raise it for Health didn't mention is that the percentage in favor of an increase is on the way down. A March 2009 survey by ClearWay Minnesota, an anti-tobacco nonprofit which is also a part of Raise it for Health, found that 72 percent of Minnesotans would support increased taxes on tobaccco.

Maybe it's a difference in phrasing: in the 2009 survey, more than half of those advocating an price increase said they'd do so to encourage quitting, and to prevent young people from smoking. This time around, when the increase was framed as a partial solution to the state's enormous budget deficit, the number was less than 60 percent.



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14 comments
SassyCassy
SassyCassy

I think smokers are way to easy to target for increased revenues.  After all everybody else gets to continue abusing their bodies while smokers pick up the tab.  Lets compare costs of alcohol use/abuse:  Economic costs in MN are estimated at $5.06 billion. These costs are 17 times greater than the $296 million in tax revenues collected from alcohol sales.Read it here http://www.health.state.mn.us/...  Its a great, recently updated fact sheet.  Then tell me would you rather have an encounter with a cigarette or a car driven by a drunk? Then ask yourselves who pays the healthcare costs of a chronic alcohol abuser, who pays to help the families destroyed by alcohol, how many unintended pregnancies are a result of alcohol, who pays for the homeless, the mentally ill and how do you compensate the family who loses a loved one in a car accident or by suicide?  I say raise the tax on alcohol and dedicate it all to our state human services department. 

English Bob
English Bob

Tobacco costs MN about $3bn a year in health care costs.  Which means that it costs non-smoking and smoking MN taxpayers alike about $21 a pack when the state collects $1.58 a pack.  So not exactly overtaxed.

Kirk the Conservative Jerk
Kirk the Conservative Jerk

Tax the POOR says the American Cancer Society!Hmm....Fact:  Over 95% of all smokers earn less than $53,000 a year.More than 50% of smokers earn less than $36,000 per year.

What was the first piece of legislation Obama signed, after being signed into office?the "Tobacco Tax" - Jan 24th 2009Increased U.S. Federal Tax on a pack of cigarettes from $0.39 to $1.01 per packIncreased Federal tax on pipe tobacco from $1.0969 per pound to $2.83 per poundIncreased Federal tax on RYO tobacco from $1.0969 per pound to $24.78 per poundIncreased Federal tax on cigarette papers (50 or less) from $0.0122 to $0.0315Federal tax on cigarette tubes (50 or less) = $0.0244 - New rate is $0.0630

Tax the POOR Obama says!But hey, it funded the State Children's Health Insurance Program (SCHIP)Good, except it was off the backs of the poor!Obama's tax pledge, goes up in smoke in only 4 days...

I say, if it's so bad, put your money where your mouth is and ban it!

Kirk the Conservative Jerk
Kirk the Conservative Jerk

Minnesota had a combined "Taxed Sales" of cigarettes of  $1,334,000,000 in 2007Also note that this Minnesota Department of Revenue survey data account for only 53%-61% of taxed sales during this period.  So lets forget about the second statement.Lets look at the tax the state did take in.$1,334,000,000 total revenue / $5 pack = 266,800,000 packs of cigarettes.Now 266,800,000 packs x $1.58 in tax per pack = $421,544,000 in taxes collected on the 53-61% of cigarettes in the study.Were do you suppose those taxes get spent on?Healthcare for children perhaps?Now what about that Tobacco lawsuit.Most of that money goes to healthcare.You also have to look at all those "tax exempt" Sales of cigarettes within Indian lands (casinos).   Should we also tax the sales there.  Which party protects Indians tax exempt status?  Which party protects Indians ability to allow smoking in indoor public places?

I apreaciate what your saying, but there is clearly one party in the way of progress of a smoke free Minnesota.I say it's all about money and not the health of Minnesotans

Tom Wright
Tom Wright

I'm an Obama Supporting Liberal and I'm with Kirk on this...

amiller92
amiller92

The poor have the option of quitting.  A totally avoidable tax that helps internalize externalities is supposed to be a conservative idea.

Jon Stewart
Jon Stewart

Dear Kirk the Conservative Jerk, You have it backwards. It is the harms form smoking that are regressive. Cheap tobacco isn’t good for ANY community. Lower-income communities already suffer disproportionately from smoking caused disease, disability, death and costs. By prompting lower-income smokers to quit and cut back by raising the cigarette tax rates will reduce those regressive harms and costs directly helping lower-income smokers.Smokers who quit or cut back because of a cigarette tax save a lot of money, and most of those who quit ARE low income smokers. Smokers who quit see an average savings of over $1,000-$2,500. Most of the benefits from quitting smoking after a cigarette tax increase are enjoyed by low-income smokers and their families. Nationwide, 60% of all smokers have incomes greater than 200% of the poverty line; but roughly three out of every four smokers who quit because of a cigarette tax increase will have incomes below the 200% poverty line. Since it is the lower-income people who quit, they see the largest public health benefits. Polls consistently find strong support for a tobacco tax increase among lower-income communities. Nobody wants cheap cigarettes in their neighborhoods. As far as making cigarettes illegal, that DOES unfairly criminalize victims of the tobacco industry: the smoker.  The goal is not to punish smokers; the goal is to prevent kids from starting to smoke, help people quit and save lives. There is NO scientific evidence that making cigarettes illegal benefits anyone, you might want to reference prohibition or the “war on drugs.” Also, we do live in a democracy and there isn’t a lot of public support for making cigarettes illegal. To put it another way, making cigarettes illegal is as effective as making ignorant writing illegal.

amiller92
amiller92

Great.  It's all the DFL's fault.  Glad we established that.

What does it have to do with whether to raise the cigarette tax by $1.50?

Kirk the Conservative Jerk
Kirk the Conservative Jerk

Hey Jon, what do you think the federal poverty level is for a single person in the lower 48 states?

It's $10,830 for a single person.$10,830 X 2 (200%) = $21,660So I'm backwards how?

Also you're assume they will quit if the price is raised.  Democrats in this state were trying to block Republician efforts to limit EBT cards to $20 a month in cash.  The Republicians were claiming they needed to do this because EBT cards were being used to by cigarettes and alcohol.  Democrat Sen. John Harrington, said people on EBT (welefare) deserve to have taxpayer funded money to buy cigarettes in his arguments on the Senate Floor.Now, what do we do about Democrats like John Harrington that support smoking by the poor claiming "it's a right"

amiller92
amiller92

Exactly what portion of the smoking in the state do you think is happening in casinos today?  And how massive an increase do you think is going to happen if the tax is raised?

I don't know the exact answers, but "not much" and "very little" are close.

Kirk the Conservative Jerk
Kirk the Conservative Jerk

What is the point if democrats will allow people to smoke in casinos and allow people on welfare to buy cigarettes with their welfare money? Personally I say lets raise it.$15 a pack should work.It's a perfect "user based fee" that is 100% optional to the user.

Kirk the Conservative Jerk
Kirk the Conservative Jerk

Cigarette sales are exempt from tax at casinos.Casinos also allow smoking indoors, and the democrat legislators continue to protect their "right" to do so.Wouldn't standing up to the democrats who support the Indian's "special rights" to poision people, also be good for "the state's pocket book"?

amiller92
amiller92

Oh, yeah, also, they don't have to quit.  They can just cut back on their consumption and spend the same amount.  Good for their health and the state's pocket book.

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