Groups Suggest Even Larger Cigarette Tax Hike

Yesterday, state lawmakers heard appeals from groups wanting to raise the cigarette tax more than twice as high as the Governor’s proposal.

To pay for education initiatives, Governor Phil Bredesen wants to impose a 40-cent-per-pack cigarette tax hike. Tennesseans for Fair Taxation and hunger relief agency MANNA want to add another 44 cents on top of that. They say the money would make it possible to cut the sales tax on food.

Christina Kretchik of MANNA argued against administration claims that food stamps insulate poor people from food taxes.

“Essentially people who are receiving food stamp benefits, there is a large percentage of those people for whom those benefits run out by the third week of the month. According to the Second Harvest Hunger Study, it was eighty-five percent of the people.”

A low income family may spend twenty-five percent of its income of food, while top earners spend only five or six per cent on food, according to Bill Howell, an organizer for the Tennesseans for Fair Taxation. Furthermore, he says the state’s tax structure hurts poor people.

“The overall tax structure of Tennessee is such that the top twenty percent of income earners pay roughly five and a half percent of their income in state and local taxes, and the bottom twenty percent of income earners pay roughly eleven point seven percent of their income.”

Kretchik and Howell named eleven lawmakers they say will support the additional cigarette tax in order to take taxes off groceries. The list included few in leadership positions.

Their proposal, together with Governor Bredesen’s, would push the tax to 84 cents a pack. Currently it’s only 20 cents.