[barfly]

October, 2008

Don't Smoke! Oh wait, we want more money...

Earlier this spring, New Hampshire lawmakers passed a bill to increase the tax on cigarettes by 25 cents to $1.33 per pack. Their justification: higher taxes deter individuals from purchasing cigarettes. However, the legislation stipulated that the tax would not rise if the current tax could bring in over $50 million between July and September.

Wait...what? So, if you smoke less you are taxed more and if you smoke more you are taxed less? How does that align with the state's paternalistic attempt to use tax increases to curb smoking?

Well, it frankly doesn't. What it does show is how reliant tax and spend lawmakers are on revenue from targeted tax hikes masked in seemingly well-to-do justifications. Taxes on tobacco products only serve to depress economic activity in the state, while growing the size of government at the expense of consumers and taxpayers. Further, these taxes are often declining sources of revenue and rope taxpayers into future tax hikes once legislators become dependent on the diminishing, but already budgeted revenue.

The worst part: New Hampshire raked in roughly $48 million in cigarette taxes between July and September, just shy of the $50 million mark that would have stopped the tax hike. Thanks consumers, you brought in just enough revenue to keep bringing in more.

[cooldude]

Let's privatize all the state revenue departments with chain smokers!