April 1, 2013
New Hampshire House of Representatives
107 North Main Street
Concord, NH 03301

Dear Representative:

On behalf of the 4,910 members and supporters of the Council for Citizens Against Government Waste (CCAGW) in the state of New Hampshire, I urge you to reject the tax increases in HB 2.  Raising taxes will only cement current wasteful government spending practices, discourage lawmakers from cutting excess expenditures, and hinder state agencies from undergoing critical review and reforms.

HB 2, which stems from Governor Hassan’s budget, would result in an increase of $0.30 to the state cigarette tax.  This would raise the tax on a pack of cigarettes from $1.68 to $1.98, which is estimated to raise at least an additional $20 million annually, while also applying to other tobacco products.  However, history has shown that raising excises taxes does not produce projected revenue, as such tax increases drive purchases to untaxed or lower-tax venues, like Native American territories and the Internet.  Of the 57 excise tax increases that states implemented between 2003 and 2007, only 16 met or exceeded revenue targets.

Furthermore, the Congressional Budget Office has reported that cigarette excise taxes are the most regressive type of excise tax and disproportionately impact the poor and those living on fixed incomes.  According to data from the Centers for Disease Control and Prevention, 37.2 percent of adults in New Hampshire who earn less than $15,000 are smokers, whereas only 11.8 percent of adults who earn $50,000 or more are smokers.

CCAGW urges all members of the New Hampshire House of Representatives to oppose any proposal that seeks to raise taxes.  Lawmakers should be focused on addressing the state’s budget shortfall by cutting taxes and wasteful spending instead of forcing constituents to hand over more of their income.  It is time to give hard-working Granite Staters a break. 

Sincerely,

Tom Schatz

President, CCAGW