April 30, 2013

Vermont Senate
115 State Street

Montpelier, VT  05633-5501

Dear Senator,

On behalf of the 4,074 members and supporters of the Council for Citizens Against Government Waste (CCAGW) in the state of Vermont, I urge you to oppose any bill that would increase state taxes.   The Senate Finance Committee is currently considering H. 528, a bill passed by the House on March 28, 2013, which includes tax increases on soft drinks, candy, bottled water, and tobacco products. 

H. 528 would increase the cigarette excise tax by $0.50 per pack and increase the tax on snuff and other products by $0.88.  Since fiscal year 2000, federal and state governments have increased cigarette excise taxes 110 times.  Supporters argue that raising cigarette taxes would increase revenue to help close the state’s budget deficit.  However, history has shown that raising excise taxes does not usually 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.  Additionally, raising taxes will only cement current wasteful government spending and discourage legislators from reviewing and reforming state agencies.

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.  Based on data from the Centers for Disease Control and Prevention, 33.5 percent of adults in Vermont who earn less than $15,000 are smokers, whereas only 9.3 percent of adults who earn $50,000 or more are smokers.  Furthermore, Vermont already has the seventh highest cigarette tax in the country at $2.62 per pack.

CCAGW urges all members of the Vermont Senate to oppose any proposal that seeks to raise taxes, including state excise taxes.  Lawmakers should be focused on addressing the state’s budget shortfall by cutting taxes to spur economic growth and cutting wasteful spending instead of forcing constituents to hand over more of their hard-earned income. 

Sincerely,

Tom Schatz

President, CCAGW