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Stop Unfair Tobacco Tax Hike in Kentucky!
Kentucky's economy has enjoyed the errors of its neighbors' tax-hiking ways for years. Except for Virginia, which imposes the same 30 cents per pack as Kentucky, and Missouri, which shares only a tiny border to the West, every neighboring state currently levies a higher cigarette tax. Smokers, like consumers of any other good, respond favorably to lower prices. Retailers throughout the state profited handsomely on sales to residents of Ohio, Indiana, Illinois, Tennessee, and West Virginia. If the Governor is successful in imposing a dollar-per-pack tax, Kentucky will lose that advantage almost completely, as only Ohio will have a higher rate.
Cigarette taxes have further direct impacts on non-smokers. Because it discourages smoking, the number of people paying the tax declines at a faster rate when the tax increases. Once that revenue begins to disappear, the state has to look for another tax to hike in order to make up for the dwindling income. Essentially a cigarette tax increase now is a virtual guarantee to increase a different tax in the future.
The last thing Kentucky needs is another tax increase. Its comparative cigarette tax advantage, now a relative boon to an otherwise mediocre economy, will disappear. Smokers and non-smokers alike will bear the brunt of the slowdown sure to follow. Do your part in stopping this destructive money grab!
| Sample Letter for Campaign |
Subject: Please oppose Gov. Beshear's proposed cigarette tax increase
Dear [ Decision Maker ] ,
I urge you to oppose Gov. Beshear's proposed 70-cent increase in the cigarette tax.
Smokers are easy targets for politicians, but boosting taxes on them will have a negative impact on all Kentuckians. Fewer people from out of state will buy cigarettes here, while our own consumers may cross the border for cheaper smokes. Given the struggling economy, a tax hike is the last thing our state needs. This regressive tax will hit the poor hardest, and in the long run the revenues will dry up as smoking rates and in-state cigarette sales decline. That means we'll almost certainly face future increases in other taxes.
Kentucky's elected officials should cut spending to balance the budget. Please reject this punitive tax hike on behalf of all your constituents.
Sincerely,
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Campaign Launched:
January 22, 2009
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We've seen the impact of a cigarette tax hike in Kentucky before. In 2005 the tax was increased to the current 30 cents per pack, resulting in an annual 11 percent drop in statewide cigarette sales. During the same time period, sales increased in bordering Indiana (3.9 percent), Tennessee (6.5 percent), and West Virginia (4 percent) as a result of residents of those states tending to stay closer to home for their cigarette purchases. If we allow Kentucky to raise the tax again, not only will more cross-border shoppers avoid the Commonwealth, but Kentuckians themselves will begin making purchases in states with lower rates.
Furthermore, an increase in the cigarette tax constitutes a regressive tax on the poor. In FY2008, 37.6 percent of Kentucky smokers had household incomes of less than $25,000, compared to just 11.9 percent who had household incomes of at least $75,000. Non-smokers' median household income was over 41 percent higher than that of smokers ($45,194 vs. $31,954). With an excise tax of just 30 cents per pack, smokers already paid $179,456,000 to the state in FY2008. A 233 percent rate-hike will cripple low-income consumers.
Kentuckians who don't smoke should be equally alarmed. Revenue from a tobacco tax hike is not sustainable, as it causes a decline in smoking. Thus, to keep a constant revenue stream, the state will be forced to hike other taxes down the road. Even if you don't see an immediate personal impact from the tax increase, you can expect to pay more for other excise taxes, or in property, sales or income taxes in the future. Additionally, the adverse economic effects described above are felt by all citizens.
Tennessee, which sports a 62-cent-per-pack cigarette tax, is undoubtedly hoping to see Gov. Beshear's plan pass into law, as are Illinois, Virginia, West Virginia and Indiana. Don't be misled -- any tax hike will have a disastrous effect on Kentucky's well-being. Tell your legislators today -- no cigarette tax hikes under any circumstances!
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