To be a smoker in America today is to be constantly kicked to the
curb — literally. A man with nicotine-stained hands cannot walk
into an office building, a shopping center, and increasingly even
the local watering hole without being reminded he is not welcome.
To that list of indignities, smokers can add another: they can’t
count on Republicans to keep their taxes low.
Exhibit A is Mississippi, where the cigarette tax — the third
lowest in the nation — hasn’t gone up since 1985. Today it will
rise a whopping 50 cents a pack, thanks to a bill signed into law
by Republican Gov. Haley Barbour. When a former tobacco lobbyist
in the Deep South who has twice vetoed cigarette tax increases is
now open to them, smokers aren’t safe anywhere.
Barbour isn’t an insignificant figure in the GOP. The former
Republican National Committee chairman is an active participant
in House Minority Whip Eric Cantor’s national council for
rebuilding the party’s brand, is slated to run the Republican
Governors Association in 2010, and is talked about as a
presidential candidate in 2012. Reports that Barbour will visit
Iowa in late June have fueled the White House speculation.
Political scientist Marty Weisman of Mississippi State University
is already comparing Barbour to the anti-tax activists’ least
favorite Republican presidential candidate from the last
go-around: Mike Huckabee. “Huckabee lacks favor with a lot of
Republicans because, though he’s 100 percent Republican, he
raised taxes several times in Arkansas,” Weisman told the
Associated Press. “I believe the eyes of the nation are on
Barbour.”
And what was one of Huckabee’s favorite taxes to raise? You
guessed it: the levy on cigarettes. Nonetheless, Barbour has
plenty of company among leading Republicans. Florida Gov. Charlie
Crist — a 2012 possibility and declared candidate for U.S.
Senate in 2010 — has said he will sign a bill raising the
cigarette tax by $1 a pack. The measure will also nearly triple
the existing tax on the wholesale price of other tobacco
products.
The $1 billion tax hike on cigarette, pipe smoke, and chewing
tobacco comes at a time when Crist’s anti-tax credentials might
come in handy against a more conservative primary opponent. “He
is a fiscal conservative who is a libertarian on many social
issues,” a Crist ally told the Orlando Sun Sentinel.
“He’s never going to win over the far-right-wing social
activists, but he’s with 95 percent of the Republican Party, and
being against tax increases is the most fundamental thing.”
Oops. To be fair, Crist has plenty of Republican cover. There
were members of his party in the legislature who took a more
proactive role in pushing for the tax increase. Ultimately, it
was passed by two Republican-controlled chambers, with one
unanimous state senate vote for a bill containing the tax hikes.
Not every Republican mentioned as a potential 2012 presidential
contender wants to slam extra taxes on a pack of smokes.
Louisiana Gov. Bobby Jindal is holding firm in his opposition,
though so far the relevant committees in the state legislature
have managed to block it without any veto being required. South
Carolina Gov. Mark Sanford has opposed cigarette tax increases
that were intended to expand Medicaid, though he is willing to
raise the tax by 30 cents a pack to help pay for an optional flat
tax that would cut participants’ income tax rates by nearly 50
percent.
Sanford communications director Joel Sawyer explained the
distinction to TAS. “If a cigarette tax increase does
what it is supposed to do, the resulting reduction in smoking
will lead to decreased revenues,” says Sawyer. “So you are
proposing to pay for permanent spending increases with temporary
revenues.” But he argues that partly offsetting an income tax cut
with a higher cigarette tax is revenue-neutral and shifts the tax
burden away from income to consumption.
Grover Norquist, president of Americans for Tax Reform, told
TAS that is consistent with the Taxpayer Protection
Pledge. “We would prefer an income tax cut without any offsetting
excise tax increase on anybody,” Norquist says. “But tax reform
— moving from one tax to another — does not violate the
pledge.” Raising the cigarette tax without any compensatory tax
cuts in order to finance increased government spending, however,
does.
Mississippi’s cigarette tax hike will go toward defraying the
cost of car tags, even though Barbour had initially recommended
against using the revenues for any specific purpose. Americans
for Tax Reform has been opposed to Florida’s increase because, as
Norquist puts it, “they are raising the cigarette tax because
they don’t want to cut spending.”
What about the public-health argument in favor of reducing
smoking? “That’s great,” says Norquist. “Then cut other taxes.
Otherwise, you just want the revenue for spending.” Norquist
agrees with Sanford’s team that using higher cigarette taxes to
pay for permanent spending increases will lead to additional
increases in the tax burden as revenues decline with smoking.
“Raising the cigarette tax today means raising the income tax or
some other tax at some point tomorrow,” he concludes.
Cigarette smoking is unhealthy and unpopular, so smokers are an
easy target for politicians who find taxes and spending as
addictive as nicotine. But as Republicans try to regain their
fiscal senses and provide a compelling alternative to President
Obama’s big-government agenda, where they stand on the most
popular of tax increases may help determine who is serious about
limited government — and who’s just blowing smoke.
