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Only the tobacco lobby benefits from tax cut

The following editorial appeared in the Rochester Post-Bulletin.

Gov. Mark Dayton may be on shaky constitutional ground with his threat to cut off the money flow to the Legislature, but when it comes to the tobacco tax cuts pushed through by the Republican leadership, he has a powerful argument.

When Dayton used his line-item veto to defund the Legislature, he did so to force Republicans to reconsider parts of the tax bill and budget bills he opposed. Chief among his objections was a tax cut package that in the next four years will reduce cash flow to the state by nearly $1.5 billion. He signed the bill because a “poison pill” in it gave him little choice, but he called it “a tax bill which favors wealthy individuals, large corporations, and special interests at the expense of the State of Minnesota’s fiscal stability.”

The GOP position was not helped Monday when the Office of Management and Budget released its latest budget update, indicating that tax revenues are $126 million short of projections for the fiscal year. Dayton wasted no time in seizing the opportunity, saying the report “underscores the dangers created by the Republicans’ irresponsible tax bill, which will cost our state an estimated five billion dollars over the next decade.”

One of Dayton’s biggest beefs is the tax bill’s reduction in tobacco taxes, specifically on cigarettes and premium cigars. Technically speaking, the GOP didn’t cut taxes on cigarettes, but it eliminated the automatic “inflator” passed in 2013 that guaranteed cigarettes would get more expensive each year.

All told, the tax cut means smokers will pay $300 million less for tobacco products in Minnesota during the next 10 years.

Keep in mind that the main goal of the tobacco tax increase in 2013 wasn’t to generate revenue, though that’s always appreciated by government; it was to encourage people to stop smoking and discourage kids from starting. Last week, the Minnesota Department of Health announced that raising taxes on tobacco products had indeed had a direct and measurable impacts:

  • Since the tax increase in 2013, smoking has decreased 10 percent among Minnesota adults.
  • Since the tax increase, 48.1 percent of Minnesota smokers report they’ve cut down on smoking, and 44.2 percent have attempted to quit.
  • Among smokers who successfully quit in the past year, 62.8 percent said the price increase helped them make a quit attempt, and 62.7 percent reported that it helped keep them from smoking again.
  • Since 2013, smoking among Minnesota 11th-graders has decreased by one-third.

Each year, Minnesotans, their insurers, the state and our hospitals are faced with more than $3 billion in tobacco-related health care costs. That means every smoker who quits, and every teenager who doesn’t start, has a positive economic impact on our state — and that’s before we consider that people who aren’t spending $150 per month on cigarettes have that much more money to spend on rent, child care and other necessities.

Republican leaders say their intention in the 2017 session was to give low-income people a break with the tobacco tax cut. That sounds benevolent, but obviously it’s not. It was a miscalculation that’s contrary to public health and has only one beneficiary: the tobacco industry.

The 2013 tobacco tax increase has encouraged people to quit or never start a deadly, costly habit, and we hope Dayton succeeds in restoring the 2013 law.

Republished with permission.


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Comments (4)

  1. Submitted by Kim Couch on 06/16/2017 - 09:11 am.

    This article like so many before it fails to inform us how much the tax
    on cigars is being cut. Another break for wealthy men.

  2. Submitted by Frank Phelan on 06/16/2017 - 09:58 am.

    Larger Game Afoot

    The break for the tobacco industry is nice, but that’s small ball for the GOP. The real plan is to create a crisis by laying the ground work for future deficits. Then when the red ink flows, they run around like Chicken Littles yammering about how the sky is falling and we must cut taxes.

    For the play book, Google “Wisconsin 2011 Scott Walker budget” to see how he cut taxes on the wealthy, then weeks later “discovered” a huge hole in the budget.

    The GOP can’t manage the state’s check book any better than I can manage open heart surgery.

    • Submitted by Greg Kapphahn on 06/17/2017 - 06:42 pm.

      The Difference Being that YOU Know the Difference

      whereas the Republican approach to state finances,…

      is the equivalent of a new “heart surgeon” with no training or experience,…

      being put in charge of the cardiology department of a major hospital,…

      then insisting that all those WITH training and experience,…

      who actually know what they’re doing,…

      MUST follow HIS example,…

      no matter how many patients die,…

      because HE’S the one in charge, now.

  3. Submitted by Richard Rodgers on 06/16/2017 - 01:09 pm.

    My Republican Friends

    Although I cannot recall one friend of mine who is a Republican, I am always open to making new friends.
    If the Republicans can see the error in their thinking when they (legislators) proposed their budget and revise the parts that will hurt Minnesotans, I am willing to seriously consider that they actually CARE about people, are courageous enough to admit, for example, that allowing the tobacco lobby to profit is wrong and that Minnesotans lives are more important and join with our brave Governor in putting together a budget that represents the best interests of all Minnesotans; I would love to declare that I have friends who are Republican.
    I admit my bias, I hear “Republican ” and immediately think, “oh no, what now?” I’d rather put aside party labels, eliminate them altogether and just listen to what ideas make sense, are in our best interests and promote health and wellbeing.

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