State Senator Mary Lazich (R-New Berlin) represents parts of four counties: Milwaukee, Waukesha, Racine, and Walworth. Her Senate District 28 includes New Berlin, Franklin, Greendale, Hales Corners, Muskego, Waterford, Big Bend, the town of Vernon and parts of Greenfield, East Troy, and Mukwonago. Senator Lazich has been in the Legislature for more than a decade. She considers herself a tireless crusader for lower taxes, reduced spending and smaller government.
With the cigarette tax increase approved in the last state budget signed into law by Governor Doyle (that I opposed), Wisconsin's cigarette tax stands at $1.77 per pack of twenty and ranks 12th highest nationally. (Source: The Tax Foundation, Washington D.C.)
Non-smokers may believe they are unharmed by this hefty tax increase. The nonprofit, nonpartisan National Taxpayers Union (NTU) thinks differently. A report by the NTU says cigarette tax increases hurt everybody:
- States with low cigarette taxes tend to have lower overall tax burdens. The per capita state and local tax burden in high-tobacco tax states is 8 percent above the national average, while the general tax bill for residents of low-tobacco tax states is 15 percent below the national average.
- Tobacco tax hikes rarely result in other cuts and are often paired with other tax increases or cuts worth less than the tobacco tax boost. "Most states that increase cigarette taxes don't refund the revenue elsewhere -- they spend it," the study notes.
- Tobacco tax increases don't prevent other hikes. Taxpayers face a seven out of 10 chance of seeing another net annual tax hike within two years of a tobacco tax hike.
- Cigarette tax hikes may encourage other increases because the extra revenue often is tied to specific spending schemes (such as health care or education) and tobacco use rates are falling -- along with potential tax collections. State governments will need to look elsewhere to fill the gap, and non- smokers could be on the hook.
- Tobacco taxes don't spur economic growth. States that adopted a tobacco tax hike in fiscal year 2003 saw an average growth rate in gross domestic product from 2005 to 2006 that was 0.6 percent lower than states that did not adopt a tax increase.