February 2, 2012

Massachusetts Senate
Massachusetts House of Representatives

Dear Legislator,

I write you today regarding Gov. Patrick’s proposed budget. A particularly misguided aspect of the
governor’s executive budget is the bevy of lifestyle tax increases that will adversely impact the state’s
economy, hurt small businesses and, frankly, serve as an unnecessary annoyance that Bay State
residents will remember as they head to the voting booths later this year. Two of the most
egregious examples are the excise tax hikes called for on cigarettes and other tobacco products –
Gov. Patrick’s proposal would increase taxes on cigarettes in Massachusetts by $.50, bringing the
tax rate to an astounding $3.01 per pack and apply the heightened cigarette tax rate to all other
tobacco products, costing taxpayers $72.9 million next year.

Excise taxes have repeatedly been proven ineffective and bad policy that kills jobs and drives
business across state lines. Jobs are at a premium amid this tepid economic recovery, yet Gov.
Patrick’s proposed tax increases are sure to reduce the job-creating capacity of small business
owners across the Commonwealth by forcing commerce across state lines. It should be noted that
taxes on cigarettes in neighboring Vermont and New Hampshire are considerably lower than the
proposed rate. Gov. Patrick should look to South Carolina, Washington, D.C., and Chicago’s
recent experiences with cigarette excise tax increases. These cautionary tales demonstrate that
consumers are not deterred by a short drive if onerous lifestyle taxes are lower in a nearby state, as
evidenced by Massachusetts’ own Sen. Rodrigues, who made news for crossing state lines to buy
alcohol in New Hampshire.

South Carolina added $.57 to each pack of cigarettes in July 2010. Despite the rate increase, records
show a decline in cigarette tax revenue in South Carolina since that time, while neighboring states
saw growth. Neighboring Georgia saw a net increase in cigarette sales of nearly 1.3 million packs in
the six months after South Carolina raised its excise tax rate. Washington, D.C. raised its cigarette
tax by $.50 in 2009 only to see an 11 percent net decline in cigarette tax revenue as consumers
flocked to neighboring states with a low tax rate on cigarettes like Virginia. When Cook County,
which encompasses the city of Chicago, increased its cigarette tax by $1 in 2006, Chicagoans
flocked to neighboring Indiana to make their purchases. Following that tax hike, The Huffington
Post reported a team of University of Illinois-Chicago researchers collected a sample of discarded
cigarette packs. According to their study, 75 percent of the discarded packs came from outside
Cook County. Massachusetts, given its geography, can expect similarly dubious results if lawmakers
on Beacon Hill elect to raise tobacco taxes.

Gov. Patrick is trying to sell this tax hike under the auspices of a tobacco use mitigation initiative.
Yet, scientific research shows that Gov. Patrick’s tobacco tax increases could be detrimental to
public health. By taxing other tobacco products (OTP) at the same increased rate as cigarettes,
Gov. Patrick is perpetuating the egregious misconception that use of smokeless tobacco is as
harmful as smoking. A 2011 analysis of data from the International Tobacco Control four-country
survey shows that more than 85 percent of U.S. smokers do not believe there is less risk associated
with smokeless tobacco than cigarettes. In actuality, risks associated with the use of smokeless
tobacco are significantly lower than cigarettes. The anti-smoking campaign brands nicotine the
culprit, when the most significant risk associated with smoking is the smoke inhaled. The
aforementioned ITC study shows that only about half of smokers correctly reported that nicotine is
not the chemical in cigarettes that causes cancer. Nicotine is addictive, but it poses no serious health
risks. Thus, the use of smokeless tobacco is proven to be a safer alternative to smoking. Smokeless
tobacco has similar nicotine levels as cigarettes, but is 98 percent safer – smokeless tobacco poses
no risk for emphysema, lung cancer, or heart disease. Though there is still a risk for mouth cancer,
it is significantly lower than smoking. A study by the American College of Chest Physicians shows
the overall mortality among snus users, a form of smokeless tobacco, was the same as nonusers of

A study by Brad Rodu, Professor of Medicine at the University of Louisville, demonstrates that the
use of smokeless tobacco is as an effective substitute for cigarettes, yielding tobacco harm
reduction. Sweden, the only country to meet the World Health Organization’s 2000 target for
reducing smoking to less than 20 percent, saw a significant decrease in smoking as the use of
smokeless tobacco increased according to the study conducted on white males. Rodu also saw a
corollary decrease in smoking attributable diseases.

Though using other low risk forms of tobacco could help smokers quit and lower overall
healthcare costs, Gov. Patrick’s budget ignores the science and raises the cost of products that are
proven to be safer alternatives to smoking. Adult smokers need to know the truth so they can make
informed decisions about their health. The false claims used by Gov. Patrick and proponents of
higher taxes on smokeless tobacco only perpetuate scientific falsehoods and serve to keep the
public misinformed.

As you work through the budget process, I encourage you to focus on cutting the fat in
government, rather than trying to control the personal choices of your constituents through
misguided lifestyle taxes. I know it irritates some lawmakers when ATR says that the government
has a spending problem and not a revenue problem, but that statement is supported by the facts.
From 1999 to 2009, the Massachusetts budget grew by 31 percent. If spending was limited to the
growth in population and inflation during that period, the Massachusetts government would have
spent $44 billion less. To prevent future budget shortfalls, ATR encourages Massachusetts
lawmakers to pass a spending cap in 2012 that will keep government spending in line with
population and inflation. Please look to ATR as a resource on this issue. If you have any questions,
please contact ATR’s Patrick Gleason at 202-785-0266 or [email protected].


Grover G. Norquist