If you notice convenience store clerks looking a little beleaguered these days, it's possible they're weathering a slew of peeved customers experiencing sticker shock.
Come April 1, the federal tax on a pack of cigs increases to $1.01. Add in a state tax increase to 62 cents a pack, and a pack of Camels or Marlboros will soon run you $6.75. Parliaments and American Spirits will jump to about $7.50. And that nickel cigar you used to smoke will take a grand leap to 40 cents.
It's all part of the latest round of new taxes on smokers, who've become the go-to target for lawmakers seeking no-conflict tax hikes. Because they lack political power and public sympathy, they're seen as an easy mark for raising money for everything from health care to general funds. But if you ask smokers, the government may have finally overplayed its hand.
"I'll probably have to quit," says a ponytailed man puffing on a Basic on Elliston Place. "Or else smoke marijuana. They can't control that."
"Yeah, I don't think I'm going to keep smoking when that happens," says Edward Sutton, who ducks out of a Circle K with a pack of Marlboro Lights. "That's way too much."
It's not like there's an alterative. To keep smokers from retreating to more cost-efficient grounds, lawmakers also raised the tax on roll-your-own tobacco by a stunning 2,200 percent. The federal tax on a pound will go from $1.09 to $24.78.
There's a logical motive, of course, in that rising costs presume a corresponding decrease in the health hazard of smoking. And in this case, the money supports the State Children's Health Insurance Program (SCHIP)—the Hillary Clinton-designed, twice Bush-vetoed, Obama-approved program that provides insurance for kids too rich for Medicaid but too poor for Blue Cross.
But since smokers statistically tend to be lower income, the irony is that the poor will now be funding the poor. And irrespective of philosophical arguments, that doesn't sound like a stable way to fund a health program, especially in a recession.
Elliston Pipe and Tobacco manager John Mahan has seen these kinds of programs fail in the past. In the end, he believes all taxpayers will be footing the bill.
"I have no problem with helping poor children get insurance," he says. "None whatsoever. It's the hypocrisy to achieve that. It's like raising cigarettes to help the schools. It's never worked. People just go to another state to buy cigarettes or quit smoking. They appropriate all the money up front and spend it, and then there's all kinds of stupid earmarks that bleed us dry. And then they turn around and raise our property taxes or whatever else, because they didn't get the money they projected from selling cigarettes."
Because prices will rise so much, it may soon be worth the drive to make bulk purchases across state lines. Until then, smokers have a few weeks to stockpile.
Yet local convenience stores aren't cooperating. Some have already jacked prices. Others recently posted signs imposing daily limits. At Mapco on Franklin Pike, customers are restricted to five cartons a day. But clerks have been ordered not to talk about the tax increase, and calls to Mapco headquarters were ignored—perhaps because businesses will also take a hit.
Though it's already been taxed once, any unsold roll-your-own tobacco will be taxed again at the new rate. For Elliston's owner Dean Trathen, that means paying a double-tax on his current stock.
"It doesn't matter how long I've had it, and they don't care if I ever sell it," says Trathen, who's sitting on about 150 pounds of tobacco on the store floor. "I'm trying to get rid of all I've got. But I've got tobacco in here I've had for over 10 years. It does not go bad. And they're gonna make me pay tax on it again just because I still have it."
He's also worried that the 2,200 percent increase on roll-your-own tobacco may force some manufacturers out of business. Marg Harbaugh, who works for Peter Stokkebye's, a top-selling brand from Denmark, believes her company will survive.
"We do expect it to slow down for a couple of months and then to bounce back, but not totally," she says. "It just may take a while for people to readjust."
A spokesperson for Congressman Jim Cooper's office says the monster increase on roll-your-own is meant to equalize its cost with conventional cigarettes. Trathen sees more nefarious motives. He considers it the end-game of the major cigarette company lobbyists, who want to take away a cheaper alternative to their own products.
"It's the cigarette companies that are behind this," says Trathen. "See, they don't make any money off somebody rolling their own cigarettes. A lot of places are going to have to go out of business. They can't pay this tax. Talk about a Boston Tea Party. When the tax is more than the product, it'd be cheaper to throw it overboard."
Or it may simply leave smokers to quit—emphasis on the may.
"Yeah, I could quit," says Mahan slyly. "But then how would the children get their health insurance?"
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