* The State Journal-Register has an editorial today that lists the benefits of a dollar a pack increase in the state’s cigarette tax. The numbers were provided by the American Lung Association…
* Cigarette pack sale decline in Illinois — 123.3 million.
* Number of current adult smokers in Illinois who would quit — 57,700.
* Increase in total number of kids alive today who will not become smokers — 130,800.
* Long-term health-care savings in Illinois from adult and youth smoking declines — $2.8 billion.
* The paper adds…
Illinois with its current 98-cents-per-pack tax raised about $634 million last year. That’s a significant revenue source, akin to the amount raised by the state lottery. A $1-per-pack increase is estimated to bring in about $412 million more annually. […]
While we sincerely doubt a $1-per-pack tax increase will gain the needed support, if legislators become serious about any significant increase in the cigarette tax, they should demand that some of the money raised be used to underwrite cessation efforts on the part of smokers. Yes, it might cut into the state’s take in the short run, but in the long run it makes both fiscal and moral sense.
* But Joe Calomino of Americans for Prosperity, Illinois, posted these numbers in comments yesterday…
The Effect of a $1/pack Cigarette Tax Hike on Illinois Retailers
* Tobacco Sales are Important to Illinois Retailers – Illinois stores sold 657 million packs of cigarettes in FY 2006, with a gross retail value of nearly $3.2 billion. Illinois merchants earned nearly $560 million in gross profits on these sales.
* Tobacco Sales Support Illinois Jobs - It is estimated that nearly 8,000 Illinois retailer and wholesaler jobs were supported by in-state tobacco sales (based on estimated gross profits). […]
* In spite of large recent tax increases of the Illinois, Cook County, and Chicago cigarette taxes, some are proposing an Illinois cigarette tax hike of $1/pack. This would raise the Illinois state tax to $1.98 per pack. Illinois residents outside of Cook County could save $18.10/carton in Missouri, $16.80 in Kentucky and $9.85 in Indiana. In Chicago the total state and local cigarette tax would be $4.66/pack. A Chicago resident could save over $44.90/carton in Missouri or over $36/carton in Indiana. A van-load of cigarettes from Missouri would have a profit potential of nearly $255,000. Such bootlegger incentives could create a situation reminiscent of the days of Al Capone.
* Loss in Cigarette Sales Volume – Cigarette volume is estimated to fall by nearly 25% on an annualized basis or by 164 million packs due to the proposed $1 tax hike in FY 2008.
* Loss in Sundry Product Sales - Sundry product sales, or products normally bought in conjunction with tobacco products, could fall by nearly $140 million due to the $1 tax hike.
* Loss in Illinois Gross Profits (value added) - Gross profits lost to Illinois retailers and wholesalers are estimated at approximately $116 million due the proposed $1 tax hike.
* Convenience Store Losses - Cigarette sales at C-stores would fall by 100 million packs due to the $1 tax hike. Gross profit losses could average about $15,000 per store
* Revenue Impact - It is estimated that Illinois will gain about $320 million from the $1 tax hike. […]
Taxes Per Pack In Chicago After a $1 IL Tax Hike and 61 cent Federal Tax Hike
Federal Tax/ Pack $1
State Tax/Pack $1.98
Cook County Tax/Pack $2.00
Chicago Tax/Pack .68
State, County, Local Sales Tax .77
Grand Total $6.43
Go here to read more. Joe said he’s working up a post for his Website and it will be up soon.
Thoughts?