State should increase ‘sin taxes’
Published 7:45 am Friday, March 4, 2016
While I understand the necessity of raising state taxes to pay for necessary government goods and services, our state lawmakers should take a minute to consider fairness.
To put it bluntly, sales taxes aren’t fair. They’re a regressive tax that all citizens must pay regardless of income or personal choice. While food and medicine are not taxed, necessities like clothes and everyday, necessary goods are taxed at the same rate. This means that a person making $25,000 a year pays the same tax on a vacuum cleaner as a person making $100,000. In poorer parishes more in need of tax revenue, that sales tax might be higher and even more unfairly burdensome.
But, consumers don’t have lobbyists working for them, so sales taxes are typically the easiest to pass.
To be fair, in a time of bad budget crisis, I do think we need to pitch in to get through a tough time. Yet I resent the fact that the people who craft our tax policy are deaf to constituent concerns. For instance, alcohol taxes (besides those on sparkling wine) haven’t been raised since the 1940s, and tobacco taxes are behind those of our neighbors in the region. Annually, LSU polls show about 50 percent of the public supports raising these taxes as well as gaming taxes. Compare that with the 14 percent of Louisianans who favor raising the sales tax.
I am no teetotaler, but items like beer and cigarettes aren’t necessities, and people can stop smoking. In fact, the nonpartisan Center on Budget and Policy Priorities has shown through data that raising tobacco taxes helps state budgets and reduces the number of smokers. In short, they’re good for the health of the state and its people.
How much money are we talking? One bill introduced this year, HB 14, was estimated to raise, by June 30, nearly $23 million in revenue — not a ton, but more than the $800,000 estimated revenue from the car rental tax. But guess which tax hike passed the House?
Last year LSU and Tulane published a joint study on the state’s tax structure. According to that study, “The average beer tax in Alabama, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee averaged 83 cents per gallon, or over 2.5 times the Louisiana rate.”
According to the same study, Louisiana brings in about $35 million a year from beer taxes alone, meaning if we only raised beer taxes to the same level as Mississippi, we could expect revenue possibly as high as $52 million — assuming beer consumption didn’t flag, and there is reason to think it wouldn’t. Mississippi has nearly two million fewer residents, and yet its department of revenue reports it sees over $30 million annually in beer tax revenues—despite the fact that consumers must also pay a higher statewide sales tax (7 percent).
Yet, despite widespread public support for sin taxes, despite the health benefits and the projected revenues that will come from raising tobacco and alcohol taxes, these taxes are apparently inviolable.
I wondered why, until Monday, when I read this in the Times-Picayune: “(Gov.) Edwards was negotiating with lobbyists who represent big tobacco and alcohol interests Monday afternoon.”
Negotiating? From the look of things, I’d say taking marching orders is more like it.