The Bad Habit We Just Can’t Kick

Since 2009 the Illinois General Assembly has tried over and over again to pass a tobacco tax which will unfairly target small business owners and the poor.

by Mark Cavers

Since at least 2009, the General Assembly has constantly been pushing for a cigarette tax increase. Despite multiple votes to block this job killing tax hike, the General Assembly keeps coming back to this tax when the are in need of more revenue. Yesterday, the Senate Executive Committee approved a bill that would hike the cigarette tax by $1.00 per pack over the next year. The bill is headed for the Senate floor where it will eventually see a full vote. But the tax faces long odds, as recently as January the House rejected a $1.01 tax hike on cigarettes. The proposed $1.00 per pack hike would come on top of the $0.98 that individuals already pay on a pack of cigarettes.

The Institute, and many others, have shown that cigarette taxes are ineffective and disproportionately paid by the poor. Low-income individuals are both more likely to smoke and smoke more often, cigarette taxes take a greater portion of their income and more of their money in absolute terms.

In addition to taking more money from those who can least afford it, cigarette taxes have a track record of failing to meet their projected revenue estimates. Only 16 out of 57 tax increases across the country brought in their project revenues. Advocates of this tax hike project that it will bring in over $300 million, but research done by the Mackinac Center on a similar tax hike proposed in January showed that tax would only bring in an estimated $251 million.

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