State would gain $377M by raising cigarette tax

Cigarette Tax SPRINGFIELD — A report said the state would gain $377 million in revenue by raising the cigarette tax $1 per pack.

The Illinois Senate passed a $1 per pack cigarette tax increase in April 2009, but since then the House has not taken up the legislation.

In light of the report by economist Frank Chaloupka at the University of Illinois at Chicago, Senate President John Cullerton said in a statement that “a cigarette tax is one of the most important agenda items for the coming year” because it would generate new revenue. The Chicago Democrat also noted the higher tax would reduce Medicaid costs attributed to smoking-related health concerns and reduce people’s desire to smoke.

Cullerton said in his statement that he will continue to urge House members to “immediate action” on the measure.

“If they fail to act,” he said, “I’m committed to sponsor legislation for a significant tobacco tax increase.”

Illinois last raised its cigarette tax to 98 cents per pack in 2002, and it had the 11th highest cigarette tax in the nation. The state now has the 32nd highest cigarette tax, Chaloupka said.

Federal and local taxes also add to the davidoff cigarette.

His report recommends raising taxes on all tobacco products — not just cigarettes — along with increasing the tax all at once instead of phasing it in smaller increments. The report also recommends taxing tobacco product inventory to prevent retailers from stockpiling it in anticipation of a tax increase.

Kevin O’Flaherty, advocacy director for the Campaign for Tobacco Free Kids, said the report’s recommendations differ from the Senate’s legislation. For example, the legislation would not tax inventory or raise taxes on other tobacco products.

“Just given where we are with the budget in the state,” he said, “The state needs to figure out ways of raising revenue. This is a way of raising revenue and at the same time reducing the costs that the state faces and doing something that’s good for public health.”

source: pantagraph.com

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