House sees no end to cigarette tax, even at their own peril

Taxpayer Association Tax Alert:

The House Revenue Committee is looking at blowing up another revenue source with HB 2122. In spite of Congress raising the cigarette tax by 61 cents last month, Oregon now wants to raise it by another 84 cents and hopes that the laws of over-taxation will not apply to Oregon. The Taxpayer Association submitted testimony that noted the most recent failure of a cigarette tax in New Jersey in 2007. In 2007, New Jersey raised their cigarette tax by 17.5 cents and the first year of the tax increase the revenue fell by$23 million instead of increasing! This horror story reminds us that the instability of the tobacco tax could completely undermine the health care budget in Oregon. Of 40 state excise tax increases only 8 met their projections (’03-’05).

Small grocery store lobbyist Rich Kosesan “It’s way too high. It’s a 50 percent increase. When you look at this along with the federal tax, government, in essence, is making twice as much a pack as the manufacturers.”