MONTGOMERY, AL (WSFA) - Last week, Governor Robert Bentley laid out his NEW TAX plan. The governor maintains that the state is looking at a long term $700 million dollar shortfall. He then laid out several proposed changes to the tax structure. I said last week that I would look at each of his proposed changes on their own and make my decision on whether I supported them or not.
As I looked over all the new tax proposals, one part stuck out to me as a glaringly obvious - YES - Increasing the tax on tobacco products from 42.5 cents to $1.25 per pack. What took so long? Alabama has the third lowest tax on tobacco in the entire nation. The national average is $1.54.
At $1.25 Alabama is still well below the national average. Governor Bentley has estimated that this tax increase would raise $205 million per year.
Let's say he is optimistic and it raises $150 million. Aren't the health benefits alone worth the increase?
Granted, in theory, there would be a diminishing return on the front end. The cost goes up, causing casual smokers to choose another habit. Younger people may then be forced away from smoking because of the increased costs. However, on the back end - years down the road as there is a reduction in tobacco use we should see a reduction in health care costs caused by tobacco use. This could be millions of dollars a year in health care savings.
So, in the end, it's an easy YES for me on the proposed tobacco tax!