Michigan Legislators Gambling with Revenue Collections

Published September 26, 2008

Dear Editor:

Reporter Dawson Bell highlights the irony of legislators standing up for the rights of cigarette smokers … but only when they’re in casinos, which share revenues with the state. (“State House Snuffs Out Statewide Smoking Ban,” September 24) Both nicotine and one-arm bandits can be addictive, but promoting gambling for revenues, while prohibiting smoking in other public places, is not equal treatment for smokers under the law.

Michigan legislators have a history of “gambling” they will get more state revenue by raising cigarette taxes. In 2002 and 2003 they raised the excise tax on cigarettes, only to find revenues failed to increase. Bruce Bartlett of the National Center for Policy Analysis has documented that higher taxes yield less revenue, not more. “That is because higher state taxes make smuggling more attractive, encouraging individuals to buy cigarettes in low-tax states and take them across the border for sale in high-tax states.” For instance, in Washington State, cigarette sales dropped after voters approved a 60-cent cigarette tax increase, according to the Washington State Economic and Revenue Forecast Council. And when Maryland raised its cigarette tax by 34 cents to a total of $1 per pack, they lost business to Virginia, where the cigarette tax was lower.

Let’s hope Motown gets it right and fights to honor smoking rights for all its citizens, instead of only refugees from Gamblers Anonymous.

Ralph W. Conner ([email protected]) is local legislative manager at The Heartland Institute.