Cigarette tax hurts the poor — chicago tribune

It comes as a bit of a shock, then, that a centerpiece of Mayor Emanuel’s plan to close Chicago’s 2014 budget gap is to raise the one tax that hits the poor the hardest the cigarette tax.

This month, the mayor unveiled a plan to hike the city’s tax on cigarettes by 75 cents per pack. This would raise the total state and local government take to a whopping $6.41 pack the highest in the nation and push cigarette prices to about $12 per pack.

The average smoker’s income is relatively low, and tobacco is not usually the first thing that gets trimmed from the family budget when money gets tight. A 2012 analysis of smokers in New York City found that combined state and local cigarette taxes of $5.85 per pack created the situation in which smokers making less than $30,000 annually spend nearly one quarter of their income on tobacco products while those making more than $60,000 spent just about 2 percent.

If all of this seems unbelievable, consider the case of a hospitality worker earning $18,000 annually and who smokes a pack of cigarettes each day. After Emanuel’s tax increase, this person would spend $4,380 annually on cigarettes, or 24.3 percent of his income. Contrast this with the burden on a midlevel manager at a brokerage firm making $80,000 annually who also smokes a pack a day. Her annual expenditure on tobacco would constitute 5.4 percent of her income.

During his campaign for mayor, Emanuel derided the city’s general sales tax as unfair to the poor. But compared to the anti poor effect of the cigarette tax, the general sales tax looks like a tax on yachts.

Emanuel defends his current proposal as a way to discourage smoking while also raising much needed revenue for Chicago. Given the city’s history, however, it’s hard to imagine either of those events happening. Instead, primary beneficiaries are likely to be neighboring states, online merchants and criminals. The only people who will end up paying the tax are the poor who can’t easily dodge it.

Smokers in Chicago have been subject to the cigarette excise since 1941, and they have become very adept at avoiding it. One of the most popular ways is by simply buying cigarettes in low tax jurisdictions or online. A carton of cigarettes that sells for about $100 in Chicago can be had for about $75 in the suburbs. In Wisconsin it goes for $70, while in Indiana it sells for $50. Online the same carton of cigarettes can be had for less than $30. While Chicago law requires consumers who buy taxed goods in other jurisdictions or over the Internet to pay a so called «use tax,» the law is mostly flouted by smokers who generally see such purchases as bargain shopping, not law breaking.

Councilman wants to raise age to buy cigarettes to 21

LOS ANGELES (KTLA) A Los Angeles councilman was soliciting support for a proposal to raise the age to purchase cigarettes to 21 years old.

Councilman Paul Koertz said that he wants to protect the health and future of L.A.’s young people.

According to Koertz, too many young people are entrapped by what he calls «a deadly habit at an early and exceedingly vulnerable age.»

It was unclear if the city had the authority to approve such a law.

A report from the city attorney’s office was scheduled to be considered by the Public Safety and Arts Committee.

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