Posted on 03/26/2002 1:58:38 AM PST by kattracks
Sacramento (CNSNews.com) - Tobacco, liquor and soda pop are the target of a Democratic-controlled California Legislature that is seeking higher taxes on those products, not to fix a $17.5 billion state budget deficit, but to create a variety of new programs that would, among other things, discourage smoking and child obesity.
Smokers would have to pay an additional 65 cents for a pack of cigarettes under legislation sponsored by state Sen. Deborah Ortiz.
An estimated $750 million a year would funnel into state coffers from the tax increase, according to supporters who intend the extra revenues to bankroll a host of new tobacco prevention and smoking cessation programs.
"This is a going to be a tough bill: it's an election year and it's a tax increase, but the money that the bill could put on the table is an attractive element," said Paul Knepprath, a lobbyist for the American Lung Association, which is spearheading support for the bill.
In 1999, California voters approved Proposition 99, which raised the state tobacco tax by 25 cents per pack. Today, that figure has grown to 87 cents, ranking California as the eighth highest in the United States. The Ortiz bill would raise the California cigarette tax to $1.52 per pack, the highest in the nation.
John Singleton, director of public affairs for R.J. Reynolds Tobacco Holdings, Inc., said tobacco taxes are regressive because they hit moderate to lower-income Californians, who comprise most adult smokers, the hardest.
"To place the majority of the tax burden on one group of people is fundamentally unfair," Singleton said, adding that the plan could wind up costing the state millions in lost sales-tax revenues.
Those smokers who want to continue puffing, but don't want to pay higher excise taxes, he warned, will either drive to one of the states bordering California, where cigarette taxes are cheaper, or purchase cigarettes online, where consumers do not have to pay state excise taxes.
In 2001, California collected $1.1 billion from the tobacco industry, according to R.J. Reynolds data.
Sen. Gloria Romero is working to institute an "alcohol retailer fee" which consumers would pay each time they bought a drink in the state. The amount of the fee has yet to be determined.
Revenues generated from the new alcohol tax would go toward funding the state's financially-strapped trauma care system.
However, when the federal government raised its alcohol tax, the wine and spirits industry lost 30,000 workers, said Jeff Becker, president of the Beer Institute, a Washington, D.C.-based trade group.
"People need to realize that there are economic ramifications to tax hikes," Becker added.
Jon Coupal, president of the Howard Jarvis Taxpayers Association, said Romero's bill is only labeled as a "fee" so the measure might end up passing on a simple majority vote instead of the three-fifths passage required of "tax increases."
A move to tax soda pop, in the hopes of curbing childhood obesity, is also drawing fire from industry forces.
Senate Bill 1520, also introduced by Ortiz, would levy a 10-cent tax on every 2-liter bottle of soda sold in the state to raise money for obesity prevention programs.
Eight states, including Arkansas and West Virginia, have similar taxes in place, which fund a variety of health service and law enforcement programs.
While the bill might fund worthy programs in California, those programs should not be funded on the backs of small businesses, said Sean McBride of the National Soft Drink Association.
"It's unfair to single out one consumer product and earmark it to fund programs that the state general fund should cover," McBride said.
Ted Costa, director of People's Advocate, a government spending watchdog group, said California's growing budget shortfall does not justify new taxes.
"This is not a Legislature that's willing to bite the bullet and cut programs," he said, predicting that the so-called "sin taxes" would gain more momentum.
E-mail a news tip to Chris Rizo.
Send a Letter to the Editor about this article.
I thought that was what the tobacco settlement was for, among other things.
It is about time California tax Homosexuality! The revenues will be astronomical! Brilliant!
Surely you pun.
And gubmint grows larger than ever.
We need spaying and neutering laws for gubmints.
I would like to see a law which states that all people working for or at the American Lung Association should do it Pro Bono. All money raised should be used only for pulmonary research
Just like Nazi Germany and Communist China.
No, the resources gathered from these taxes will certainly be used to encourage homosexuality.
I would not at all be surprised to see a heterosexual tax.
Why Gloria, it should clearly be one hundred zillion skadillion eleventy trillion dollars for one shot of alcohol.
In richest liberal tradition.
May you live a veeeeeery long life.
I've got 'til Tuesday.
Gates kind of threatened this not too long ago. Basically, states that didn't accept the Atny Gen'l's settlement and demanded a "non-bundling" of software with the operating system would not have the operating system sold in their states.
It's about time some industries did the shrug of Atlas.
"If you get too cold I'll tax your heat, if you take a walk I'll tax the streets..."
The Stevie Ray Vaughan cover version, that is.
Scouts Out! Cavalry Ho!
Are they JUST NOW figuring this out?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.