Smokers more than pay their “fair share,” doling out $73.5 million to the state government in excise and sales taxes in 2007. Cigarette taxes are craftily presented as a tax increase that affects only smokers, but that isn’t the case.
The Maryland legislature, for example, passed a $1 cigarette tax hike last year, saying it would be a reliable source of revenue. But now, to their “surprise,” the revenue is expected to come up $20 million to $25 million short. This lack of cigarette tax revenue is a key contributor to the state’s budget deficit, and now non-smoking residents will have to foot the bill.
Studies have shown that states with higher cigarette taxes also have higher total tax burdens. That’s no coincidence. Cigarette taxes are an unstable source of revenue for the state and, like other tax increases, should be avoided.
John Nothdurft ([email protected]) is the budget and tax legislative specialist for The Heartland Institute.
John Nothdurft joined the staff of The Heartland Institute in May 2008 and left in January of 2019.
