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Rendell proposes cigar, tobacco tax

Students who use tobacco products may find themselves having to scrounge for more change if a proposed statewide tax on cigars and smokeless tobacco is passed.
The new tax is part of Gov. Ed Rendell's 2009 budget plan, and the proposal will add an additional 36 cents per ounce on loose tobacco and 36 cents for every 10 cigars.
"It is my choice to smoke," Kara Shaffer (sophomore-management) said. "It might be unhealthy, but it is a little absurd to keep increasing the price for people who do smoke."
Rendell pitched the tax two years ago, but the proposal did not receive enough votes to pass. The Pennsylvania Senate Finance Committee will spend the next two weeks reviewing the governor's budget proposals, according to the state Senate's Web site.
Rendell is also proposing a statewide tax increase on commercial cigarettes, ratcheting the price up from $1.35 per pack to $1.45.
This tax not only affects the customers who purchase tobacco products, but the businesses that sell them as well.
"A large portion of businesses around here are mom and pop shops," said Russ Keller, owner of The Cigar Den, 127 S. Fraser St. "When you impose taxes that affect people significantly, it will force them out of business."
This tax comes on top of the current economic difficulties and a recently passed federal tax increase on cigarettes. President Obama authorized the tax increase to support the State Children's Health Insurance Program (SCHIP). The SCHIP bill will go into effect on April 1 and will increase cigarette tax by 62 cents, making the total $1.01 per pack.
Aside from Florida, Pennsylvania is the only state that does not currently tax cigars or smokeless tobacco. Consequently, Pennsylvania is home to four of the eight largest cigar distributors in the United States, according to a recommendation sent to legislators by Cigars International, a Pennsylvania cigar distributor.
"It's convenient for legislators to levy a 'sin' tax," Keller said.
New taxes could drive distributors out of the state and cause small businesses, such as Keller's, to close its doors. If this were to happen, the state would lose a large portion of revenues from sales taxes, income taxes and other taxes that are produced by these businesses, Keller said.
Keller compares the new taxes to the Boston Tea Party -- that tax "caused a revolution."
While the tax may not spur a revolution, it is another in a string of setbacks for local smokers, Keller said. In 2008, Rendell signed a bill banning smoking in 95 percent of public places across the state.
"Think about it," Keller said. "There is already a public smoking ban. Now if you do smoke, you're being punished even more by paying extra taxes."

Source: The Daily Collegian Online