The Lexington Herald Leader’s Tom Eblen continues the same old drumbeat for a cigarette tax hike with a neat little twist:
“It’s a rare occasion when Kentucky legislators can save taxpayers money by raising a tax.”
“Gov. Steve Beshear’s proposal to raise the state cigarette tax by 70 cents a pack is one of those occasions. The proposal is not only good public policy, it’s a financial no-brainer.”
Let’s be clear: there is nothing “no-brainer” about the full frontal attack on the legislature to raise the cigarette tax.
Eblen can claim, as the big-taxers keep doing, that higher cigarette taxes will save the state billions of dollars in healthcare expenses.
But he gives it away when he blithely dismisses part of the math. You see, Kentucky can’t afford to jack up the cigarette tax because of the cross-border retail sales tax revenue we would lose.
Eblen says this:
“Kentucky lawmakers will get a lot of pressure from border-county retailers, who make big bucks selling cigarettes to bootleggers who resell them in high-tax states.”
Official revenue estimates for a cigarette tax increase never include the lost revenue from the cross-border activity — bootlegging — on which Kentucky’s appropriators actually count quite heavily.
And if the tax hikers could botch that part of the equation, how hard would it be to believe they got the healthcare part of this no-brainer wrong?
About as hard as it is to believe that the bootleggers who can drive cigarettes out of state can drive back in, bringing cigarettes to Kentuckians from low-tax states. And those cigarettes would net the state nothing in sales taxes.
The clincher on this “no-brainer” is as simple as loading up the same trucks full of cigarettes that now leave Kentucky headed toward New York and driving them from Missouri to Kentucky.
Then we would need higher taxes on something else to pay for the revenue we just lost. And on and on…
For people who want higher and higher taxes, this looks like a great plan. For the rest of us, it looks like this: