Guest Column: Smoking Isn’t Good for You but Neither Are Misguided Tax Policies

Don Haggar is the South Dakota state director of Americans for Prosperity, and was recently a State Representative, representing District 10, and served as Speaker Pro Tempore of the House.

Smoking Isn’t Good for You but Neither Are Misguided Tax Policies
By Don Haggar

South Dakota House Speaker Mark Mickelson isn’t the first politician to say education is “the foundation upon which our citizens build their futures.” Or tout an “educated and trained workforce” as the “number one” tool for economic development. And he believes that post-secondary technical schools are an important component in building this workforce.

He’s right. Technical schools expand opportunity for thousands of students by teaching valuable skills that are essential to keeping our society running.

Unfortunately, Speaker Mickelson has come up with an ill-advised way to bring down the cost of tuition at these schools. He’s pushing a ballot initiative that would increase cigarette taxes by $1.00 per pack to fund a multipurpose slush fund for technical post-secondary technical institutes in the state.

Reducing the number of South Dakotans who partake in a habit that kills 480,000 Americans every year and, increasing the number of people who can attend technical schools and pursue opportunity seems like a win-win, right?

Not so fast.

For starters, smokers today tend to be lower income or even at or below the poverty line. Cigarette taxes unfairly squeeze many who are already struggling just to get by.

Of course, if they can’t afford the unhealthy habit, quitting is the best option.

But for a lot of smokers, it isn’t so simple. If it were, they would have already kicked the pricey vice. And here again, income level matters. Studies show that the more educated and affluent who have better access to support and cessation aids like patches and gum have a much higher quitting success rate.

Even if South Dakota smokers do quit, for this ballot measure, that would be a problem.

The proposal promises up to $20 million in financial support for technical schools. But what happens when people stop buying cigarettes and the required tax revenue dries up? It’s happened before. In New York, cigarette taxes are so high they exceed the base cost of a pack of smokes. Yet, the Empire State’s revenue from cigarette taxes fell $400 million from 2010 to 2015. In Illinois, four years after a 2012 cigarette tax increase revenues were $419 million below projections.

It’s risky and irresponsible to fund a worthwhile cause with a revenue source that’s sure to diminish over time.

And the negative consequences don’t end there. The tax also threatens small businesses, especially those that are close to state borders.

Significantly lower cigarette prices in our neighboring states will lure South Dakotans across the line to buy cigarettes—and likely fill up on gas or purchase groceries while they’re at it. When Wisconsin twice raised tobacco taxes between 2007 and 2009, border stores suffered a significant drop in tobacco sales, one claiming they were down by as much as 40 percent. Meanwhile, across the border in neighboring Illinois, where lawmakers had yet to enact higher cigarette taxes, one store owner estimated a 35 to 40 percent boost in cigarette sales.

Nationwide, this border state price disparity has given rise to substantial criminal activity. The Mackinac Center for Public Policy notes, “few politicians realize when they vote for higher excise taxes that doing so may dramatically increase cigarette-related crime such as smuggling.” And their study shows that in New York, which boasts the country’s highest cigarette taxes and the highest cigarette smuggling rate, smokers “consume more smuggled cigarettes than they do legally taxed ones.”

We can all agree that smoking isn’t good for you. But neither are the side effects of misguided tax policies. South Dakota lawmakers should find another way to fund technical education and South Dakotans should think twice before signing a petition that would put this tax hike on the ballot.

29 Replies to “Guest Column: Smoking Isn’t Good for You but Neither Are Misguided Tax Policies”

  1. Anonymous

    Punishing marginalized people by making them pay a tax because the rest of society does not want to pay it is morally wrong. None of this debate, however, is based on a concession that ANY tax increase is necessary to make South Dakota’s technical schools less expensive or to pay for the desired aid to the technical schools and/or their students.

    Reply
    1. Tara Volesky

      Remember how video lottery was sold to the people…..education, education, education……….and where does the money go? Slush fund. Not falling for it again. Didn’t they just raise a half penny sales tax for education? Sorry, act like a Conservative.

      Reply
  2. David Barranco

    These two points are rock solid:

    “What happens when people stop buying cigarettes and the required tax revenue dries up? It’s happened before…..the Empire State’s revenue from cigarette taxes fell $400 million from 2010 to 2015. In Illinois, four years after a 2012 cigarette tax increase revenues were $419 million below projections.”

    Haggar is right. As much as we may disapprove of smoking, recent history shows we can’t rely on program revenue from this source.

    “The tax also threatens small businesses… close to state borders. Significantly lower cigarette prices in our neighboring states will lure South Dakotans across the line to buy cigarettes—and likely fill up on gas or purchase groceries while they’re at it.”

    100% correct. The data is clear.

    Reply
  3. Jesse

    Cheap smokes are good for the state. Their entertainment when drinking and playing video lottery and smoking is better for kids than using pot.

    Reply
      1. Anonymous

        Those “some people” are
        called actual Republicans. Feeding govt and increasing its size through “fees” or “taxes” accomplishes the same thing.

        Reply
        1. Anonymous

          Smokes tax is also a user fee. I wish Don had not supported so many tax and spending increases. I finally agree with him, but he probably would vote with Michelson if he wasn’t being paid to do the right thing.

          Reply
          1. Anne Beal

            No the cigarette tax is a tax, by making a group of people pay for goods and services received by other people. Tuition is a user fee, paid by the same people who receive the goods and services. That’s the difference.
            I can’t believe anybody needs to have this explained to them.
            Cigarette taxes are popular because they are paid by an unpopular minority.

            If we are going to tax an unpopular minority, why not be REALLY obvious and tax head scarves and goat meat?
            Another possibility is a big tax on Ensure & Depends.
            I’m sure there are other groups of unpopular people who could be targeted with additional taxation.

            Reply
  4. Anonymous

    Meanwhile, there’s a large group of people (many of whom must remain anonymous) who are pleading to be taxed — BEGGING to be taxed — in exchange for the decriminalization of a plant that causes very little harm (certainly less harm than alcohol and cigarettes) and is going to be grown and consumed by almost everyone who wants it anyhow. Colorado got over $200 million in 2016 alone, and guess what? The sky hasn’t fallen, and no one there wants to go back to the way it was before.

    Reply
    1. KM

      I bet residents of Durango, CO would disagree with your statement.

      Do you know what that $200 million in tax revenue funds? Did they tell you education? Well, seems there are some problems with that tax money. I know it’s easy to fool people when they’re high, might be best if you did some more research.

      Reply
      1. Miranda Gohn

        KM,

        “BEGGING to be taxed — in exchange for the decriminalization of a plant that causes very little harm ”

        What a joke and that statement alone is the common theme that is so deceptive and is a huge problem that must be overcome.

        Check out this site and the videos. http://www.poppot.org/

        Pregnant mothers smoking pot is not good yet is now fairly common in Colorado with all the messaging out there. One of the videos speaks to this since legalization has occurred there. I mentored a high school student born with Fetal Alcohol Syndrome about 15 years ago and we had a great experience but this person will be very limited in life and will always need to be cared for. Social costs will outweigh the highly promoted tax revenue they claim in this particular case.

        Reply
        1. KM

          Miranda – It is a joke. That poor baby that died because of ingesting MJ, so sad. How can these people be so ignorant?

          Ask a question and they avoid answering. Where does that $200 million in tax revenue go, this is the answer we get…you’ve lost this war and your long con has ended.

          Anne is right, pot smokers/growers have no intentions of paying taxes and that’s why we still see illegal sales of MJ in CO, WA and OR.

          Reply
          1. Anonymous

            I have no idea how Colorado spends their marijuana tax revenue, KM, and I honestly couldn’t care less because I live in South Dakota. But they are taking in $200mil/year. Even a fraction of that would help our budget issues in SD.

            Reply
            1. KM

              10:57 – If you don’t care, why do you bring it up? You state a fact, but don’t explain how that fact could benefit SD? Tell us how the $200mil/year benefits CO and how that could apply in SD, then maybe it would be easier to support this bill. Sometimes it’s just too easy.

              Reply
  5. Anonymous

    Sorry ladies but your narrative doesn’t square with reality.

    None of the states that have legalized marijuana — not one, either medical or recreational — have gone back. None have even seriously considered it, aside from the lunatic fringe that doesn’t acknowledge facts. Nor will they. Because once the veil of prohibition is lifted, the vast majority of people (even non-users) see it for the folly it has always been.

    You’ve lost this war. Support for legalization is at an all time high — 61% support recreational legalization, and an astonishing 88% support medical legalization.

    https://www.cbsnews.com/news/support-for-marijuana-legalization-at-all-time-high/

    Your long con has ended. The only question is: when will South Dakotans be smart enough to take advantage it?

    Reply
  6. Anne Beal

    the people who want marijuana legal have no intention of paying taxes on it, they think they’ll be able to grow their own. They won’t.

    The trouble with the IMs on this is that the regulations imposed on the cultivation and production are so onerous that hardly anybody will be able to grow their own legally. It’ll be like moonshine: most of us are perfectly capable of distilling our own but it’s against the law to do that.
    I get the whole methanol-causes-blindness thing but I doubt anybody would accidentally smoke poison ivy.

    Reply
  7. Emoluments Clause

    Republicans fighting Republicans, I love it…. But it looks like, however, that I am going to need to get more popcorn….

    Reply
    1. KM

      Oh goodie, you again and your knowledge drops. What a statement…get more popcorn…who even says that, high schoolers?

      Maybe you should focus on your parties destruction. Haven’t you mentioned support for Bjorkman, did you noticed what Living Blue is doing to him? Or maybe, you can continue with the Sioux Falls Arc conversation, that seems to be going well.

      Reply
      1. Emoluments Clause

        I must be having an impact, since you are obviously obsessed with my comments…. Are you keeping a file?…… Hahahahaha…. (Let me help you…;-)…..)

        As far as the Democrats, well, Will Rogers once said it best….”I am not a member of an organized political party, I am a Democrat….”……. Oh, I am sorry an other “knowledge drop,” but where I come from they are known as facts, but if you live in a world of “alternative facts,” then “knowledge drops” or facts can become a “stubborn thing,” I guess…..

        Reply
        1. KM

          Obsessed….too funny! I don’t smoke weed, so I have a pretty good memory;)

          Yes, an organized political party is surely not what the Democrats are. Hilary steals the nomination from Bernie and then looses the election. Warren claims to be a Christian, but pushes abortion-on-demand. Debbie WS hires an IT guy that reeked havoc on the DNC and we haven’t heard the last of that circus. Pelosi and Perez have wildly different standards for how Democrats should be represented. Yes, Antifa! No, Antifa!

          Organized, definitely not. Who is Will Rogers anyway? How old do you think I am?

          Don’t you cite NYT? HufPo? CNN? Maybe you missed the fake news memo?

          I know the desire to be a Republican burns within you, as you are often gracing us with such intellectual insight. Here we are allowed to disagree with each other, have discussions and motivate to help all Americans. I know it’s tough being apart of a comment section where everyone agrees…boring.

          Reply
          1. Emoluments Clause

            Neither do I, in fact, I have never even had the opportunity to “not inhale,” how about you?

            Speaking of Bernie, how about the guy who had never run for office before and then wins the Republican nomination, who then cuts a deal with the Dems on the debt ceiling to Congressional Republicans dismay?

            Oh, are you saying I am not a Christain because I am pro-choice, too. I don’t think so sister. I am as opposed to abortion as you, but its a moral issue and not a political issue. That is why the great conservative Barry Goldwater was pro-choice, because he understood the libertarian argument at hand…

            But since you have decided to qualify people’s Christianity, does causing a war based on a lie make you a non Christian too?

            You are probably right that Debbies’s IT messed up, but a lot of Democrats like Debbie messed up by supporting Hillary from day one. I have never been a big Hillary fan, but I would definitely take her over “The Donald” right now…

            And as far as Antifa, well, at least my party debates the level of support for an anti-facist group, while your Party is strangely apologetic towards fascism…..(????)

            Do you really believe that on a regular basis that the NYT, HuPo, and CNN intentionally create “fake news?” If that is the case, then there is no hurricane in Florida right now….

            As far as being a Republican that “burns within you,” you are kind of right. In many ways I am a conservative Republican, except that my Christian values force me to vote for Democrats because I want everyone to have health care, control of their own bodies, no unnecessary wars (are any wars necessary?), and at least a living wage for all….. (WWJD?)

            Oh, I almost forgot. Who is Will Rogers? Well, he is a satirist from the 1930s, which is before both of our times, I realize. But like Lincoln, sometimes people choose to heed the personalities of the past and what wisdom that they had to offer in their time which is still useful today, so as to not make the same mistakes once again, but if you are going to call a news agency, which is currently reporting an actual hurricane, “fake news,” then you probably are not interested in learning from the past as well…. Let me guess, it’s “fake history,” right?

            Reply
            1. Anne Beal

              Emoluments Clause, if you haven’t ever smoked weed you are out of touch or really young or never went to college. Just what are your qualifications for an opinion on anything?

              As for your belief that abortion is a moral issue and shouldn’t be prohibited by law, lying, stealing, killing are all moral issues. All of them are covered by the Ten Commandments so none of them should be backed up by civil law, right?
              I think receiving foreign assistance in a political campaign is a moral issue, not a criminal one. What a hoot, all this fuss about Trump Jr receiving worthless information from a woman whose sole agenda was international adoptions, while the Clinton Foundation raked in millions of direct cash payments from foreign governments, which was in turn paid to Clinton Jr as salary for doing nothing. There you go: Trump Jr got worthless information, Clinton Jr has amassed a net worth over $10 million.
              And you’re still beating the emoluments clause like some kind of wind-up toy, and now you admit you have never even smoked pot.

              Reply

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