IL State Senate wants $1 cigarette tax increase as federal hike set to take effect

[The Straight Story]

State Senate wants $1 cigarette tax increase as federal hike set to take effect

Posted by Ashley Rueff at 12:30 p.m.; updated at 1:48 p.m.

SPRINGFIELD---The state's cigarette tax would leap by $1 over two years under a proposal a Senate committee approved today hoping to come up with more money to pay down the state's big backlog of Medicaid bills.

The legislation would increase the state's 98-cent tax on a pack of cigarettes by 50 cents this year and another 50 cents next year. Lawmakers are looking at an Illlinois increase as the new federal 62-cent hike is set to take effect Wednesday.

The Illinois proposal, sponsored by Sen. Jeff Schoenberg (D-Evanston), is aimed at taking advantage of a temporary boost in the amount of matching funds the federal government will give states through the stimulus package. Schoenberg estimated the legislation could generate $1 billion over two years.

The Democrat-controlled Senate Executive Committee advanced the state tax increase on a party-line 7-5 vote and it now goes to the full Senate.

http://newsblogs.chicagotribune.com/clout_st/2009/03/state-senate-wants-1-cigarette-tax-increase-as-federal-hike-set-to-take-effect.html

[Occam Bandage]

1. Good. nt

[Telly Savalas]

2. Has anybody modeled a Cancer Stick Laffer Curve?

Surely there's a point where cigarette taxes get so high that they discourage enough people from smoking such that further increases yield less revenue. At that point the only thing the tax creates is more obnoxious whining from smokers.

Do policymakers actually make actuarial projections for the revenue coming from these taxes and deem it to be an appropriate fit to the programs they're intended to fund, or do they just see nicotine addicts as easy targets and tax the shit out of them in a lazy attempt to compensate for the the legislature's inability to make an effective budget?