Democrats on New Mexico’s legislative tobacco committee came out with a plan this past Wednesday to burden the New Mexico taxpayer and put constituents out of work.
The Democrats want to raise taxes on cigars and smokeless tobacco from the current 25 percent of wholesale cost to 57 percent. However, Republican Gov. Susana Martinez is thankfully bringing sanity to this circus as she made it clear that she will oppose this tax increase proposal.
The “promise” of new revenue – $7 million – would lead to an array of adverse economic and health consequences for New Mexico. Lifestyle taxes, such as taxes on tobacco products, have consistently proven to NOT be source of sustainable tax revenue. For example, in the case of Washington, D.C., a recent increase in the tax on cigarettes correlated to a 20-percent decline in tobacco tax revenues.
According to the Mackinac Center for Public Policy, New Mexico is among the top five states for smuggling destinations with 37.2 percent of all tobacco products coming from smuggling. While most smugglers are average citizens trying to save the dollars in their wallets, in other instances, smuggling is orchestrated by violent criminals.
The USA Today recently noted:
A recent wave of state tobacco tax increases, designed to pump revenue into cash-strapped local governments, is inspiring an increasingly dangerous cigarette smuggling industry where big profits lure violent criminal gangs and drug traffickers into the booming illegal market, according to law enforcement officials and court records.
Additionally, there is a growing body of scientific research that suggests that there is a difference in the health risk between the use of cigarette tobacco products and smokeless tobacco products.
Smokeless tobacco products are an integral part of an effective tobacco harm reduction policy. Britain’s College of Physicians has concluded that, “Smoking is many times more dangerous than smokeless tobacco use.” The American Cancer Society has produced data that shows a cigarette smoker has a 10-percent higher risk of oral cancer than an individual who uses a smokeless tobacco product. For example, in Sweden a smokeless tobacco product that is now readily available has lead to a sharp decline in the use of cigarettes.
As such, New Mexico Democrats need to realize that this is not a laughing matter for the taxpayers of their state; it is just plain old bad economic policy.