Democrats thought they had something for a minute. After the GOP majority reduced the cigarette tax the revenue didn’t shoot right up the next day. It actually did not shoot up the first month either. Naturally this made knees jerk all over the party headquarters and the muttering began about how decreasing the tax forced us to reduce valuable government services. (Women, children, and public union employees hit hardest.)
The media permitted them their druthers, for good or ill, and it became a matter of public record that the NHDP had embarked on a nah-nah told you so PR campaign about taxing tobacco products.
Then tobacco revenues went up. They went up 1.8 Million ahead of plan last month. What was more important was that this increase ended what the NH House majority claims was a five year downward trend. 2011 minus five carry the tax deduction…well, since just about the time the democrat majority experiment began. (And hey, someone please call Rep Christine"Nostradamus" Hamm, D-Hopkinton, and rub it in her face.)
So why bring it up? One month, 1.8 million over plan, not that much really. I mention it because Big Government.com just posted a piece that references data from the CDC and other sources on the ongoing futility of using cigarette taxes as a source of state revenue. Smoking is still on the decrease, which is good. I count myself among the legions of former smokers, though cost was not then a factor. The number of cigarettes smoked per day is down, which is also good but reductive from a revenue perspective. And a majority of cigarette tax increases never really produce the expected revenue. This is partly due to the affects of taxation, and to some degree due (apparently) to smuggling. High taxation and regulation lead to illegal behavior–which adds costs to deal with the "crime " created by them–so feel free to postulate the downsides yourselves; but raising taxes is no guarantee of more revenue, so I think it is time for another discussion about tobacco taxes, and why we need a long term plan to cut them until they are not taxed at all.