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Smokers and drinkers should pay for economy’s collapse?

“Dont’ tax you. Don’t tax me. Tax that man (smoking and drinking) behind the tree.” (state senator leader Marc Basnight the late Senator from Louisiana, Russell B. Long, wth parenthetical phrase added to provide NC context)

Earlier this week NC senate leader Marc Basnight suggested that he may be considering increases in cigarette and alcohol taxes (but no other tax increases) to address a portion of the state’s large budget gap.

On the one hand, this is a positive development. Perhaps news about how balancing the state’s budget with spending cuts alone will hurt the economy and weaken families and their communities is finally making it to the state’s leaders.

On the other hand, these particular tax increases are terrible policy ideas that will 1) unfairly burden low- and moderate-income taxpayers; 2) make future budget gaps deeper; and 3) hurt the state’s economy by taking money out of the hands of people who were otherwise going to spend it their local economies (unlike taxes on higher income taxpayers who don’t spend all of their incomes).

What would be better solutions than cigarette and alcohol taxes? There is no shortage. How about closing corporate tax loopholes that are wide enough to drive a semi truck through? How about adding a few services such as entertainment to the sales tax base? How about reinstating that top income tax rate we had recently but did away with? There more ideas where these came from.

Doing what’s in the best interest of the state will require more than easy, quick-fixes. Hopefully, we can soon begin discussing solutions to the state’s current bind that also strengthen the state’s long-term fiscal outlook and are fair to all taxpayers. People who drink and smoke didn’t cause this economic collapse so why should they alone bear responsibility for making it right? The answer? They shouldn’t.

2 Comments


  1. Offshore Watch

    January 26, 2009 at 12:38 pm

    thanks for your analysis Ms. Mejia. Very insightful. Lets hope the House and the Senate has an honest debate about ‘tax loopholes’ Lot of da loot done gone offshore, you know.

  2. Kimberly

    January 26, 2009 at 2:07 pm

    I am not in favor of the “sin tax” at all. Yes, cigarettes and alcohol aren’t good for the body but it is up to an individuals choice to drink or smoke and they shouldn’t be taxed on it. It opens the door to taxing other “sins”, those things that are perceived by one part of our population as a “sin” which can be just about anything. How about we defund some of the government pork projects and take the money for paying down the state debt? There are many other things that can be done besides a “sin tax”. People who smoke and drink will just drive over the border or order online if needed.

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