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TagsBY BOB HOLT
NEWJERSEYNEWSROOM.COM
New Jersey has never been like all of the other states. Going against recent trends of raising cigarette taxes, New Hampshire, New Jersey and Rhode Island have considered reducing theirs, in the hope of drawing smokers from other states and increasing revenue.
Supporters argue reducing the tax by a dime would make New Hampshire more competitive with Maine, Vermont and Massachusetts, while opponents say that even if the state experienced higher sales as a result, it still would lose millions of dollars in revenue.
Backers of the tax-cutting bills make the case that cigarette tax hikes operate like tax cuts– when taxes go up, revenue decreases, because smokers cut back, buy smuggled cigarettes illegally, or cross state lines to purchase cigarettes in cheaper jurisdictions. On the other side, they say cutting cigarette taxes will bring in more revenue.
In New Hampshire’s case, according to biggovernment.com, a study showed that a 10 cent cut such as that proposed by legislators would bring in an additional $12.8 million.
An Associated Press story on Yahoo Finance reports that New Hampshire’s Statehouse passed a bill that would cut the rate 10 cents to $1.68 per pack in hopes of attracting smokers from surrounding states with higher taxes. New Jersey last year considered reducing its tax 30 cents, to $2.40 per pack, but hasn't followed through on it.
Most states are taking cigarette taxes in the opposite direction. The New American Gazette reports New York is once again proposing tax hikes on tobacco. Senate Bill S. 2981 would add an additional $1.65 tax to the already staggering $4.35 the state levies on a pack of cigarettes.
