Who has two thumbs, will fail to generate revenue, and kill jobs in Utah? This guy: Utah’s tobacco tax hike. ATR has blogged in the past about the portion regarding Utah’s cigarette tax, see here, here, and here. However, hidden in the bill is an uglier and more regressive monster that increases the tobacco tax from 35% of the manufacturer’s price to a whopping 86%. Whenever politicians raise these taxes they claim they are going to raise revenue and protect “the children,” but in reality they sabotage their revenue and unfortunately kill jobs.
The Salt Lake Tribune has featured a story on Jeanie’s Smoke Shop, Utah’s oldest smoke shop. Owner Gary Klc has stated that if Herbert does not veto this tax hike, his smoke shop will end up owing an additional $125,000 in taxes on inventory, a burden that will effectively shut the 50 year old store down. Kendrick Woolstenhulme of Hungry Trout Cigars and Smoke Shop said “"I won’t be ordering any more inventory, and I’ll deplete as much stock as I can. And if I still can’t pay the tax bill on July 1, the only option I have is for the state to come after me."
Gov. Herbert has stated that he will not veto the tobacco hike. The Utah Legislature carelessly patched their budget with $44 million that is supposed to come from tobacco revenue despite the fact that states always fail to meet projected revenues. And with what will be happening to smoke shops in Utah, it should be no surprise that these taxes lead to less revenue. Not only will these shops close hurting revenue, but they add to growing unemployment number caused by taxes and government spending.
 (photo by Jotor)