Georgia - tobacco tax possible increase - now at 37 cents per pack..

March 7, 2011 - Georgia lawmakers are considering an 84 percent increase in the state’s tax on cigarettes. Smokers say it’s way too much. Health advocates say it’s not nearly enough. The proposed increase, from 37 cents to 68 cents per pack, would raise the state’s cigarette tax from the lowest in the Southeast to among the highest.

“We don’t think that the 31 cents goes far enough,” said Dan Curran, spokesman for a coalition that includes the American Heart and Lung Association and the American Cancer Society. “Raising the tax by $1 would bring in more than $354 million for the state in one year and the tax would still be below the national average of $1.45.”

The state’s cigarette tax has stood at 37 cents since 2003, when the Legislature voted to raise it from 12 cents. In January, the Special Council on Tax Reform and Fairness for Georgians released a set of proposals to remake the state’s tax code, including a jump in the cigarette tax. The council proposed a 31-cent-per-pack increase, which it said would generate an additional $114 million in tax revenue.

The 11-member tax reform council spent months considering the cigarette tax and other issues, said member Gerry Harkins. “The way we were looking at it was to find a [tax] rate that wasn’t the highest among the surrounding states, and something that wasn’t the lowest,” he said. “We wanted to be somewhere in between. Something that wouldn’t hit the retail establishments too hard.” “We looked at tobacco for a long time,” Harkins said. “We also considered that tobacco use does have a health cost, but it wasn’t our purview to tell the Legislature how to use the funds.”

The U.S. Centers for Disease Control and Prevention estimates that the health costs caused by smoking total $7.18 per cigarette pack sold in the United States. And the CDC estimates that smoking cost the U.S. economy $96 billion in 2009, the latest statistics available.

Georgia taxpayers spend about $550 each year per household in subsidizing health care costs for smokers, according to Rep. Ron Stephens, R-Savannah, who supports the tax increase.

He said that Georgia’s current rate is the fifth-lowest in the nation, and the health care costs of smoking put an unfair burden on nonsmokers. “I look on this increase as a user-fee for smokers, not a tax,” Stephens said. But he’s not certain that it will pass. “Most of my colleagues will look on it as a tax increase,” he said.

Representatives from both the Georgia Tea Party and the Tea Party Patriots weighed in on the tobacco tax issue, and they are against it.

Cigarette tax per pack

A pack of cigarettes costs about $4.50 in Atlanta, depending on the brand and where you buy the pack. In New York, the state tax alone is $4.35, and in New York City, the total cost of a pack can exceed $9.

Federal excise tax $1.01 per pack

State excise tax:
Top five (per pack: New York $4.35, Rhode Island $3.46, Connecticut $3,
Washington $3.02, Michigan $2.52.
Bottom five (per pack): Alabama 43 cents, Georgia 37 cents, Louisiana 36 cents, Virginia 30 cents, Missouri 17 cents. (Sources: National Conference of State Legislatures, nyc.gov, AJC research)

Reference: Plan boosts cost of smokes Cigarette tax jumps 84 percent in proposal by Rich McKay, The Atlanta Journal-Constitution, 3/6/2011.