May 7, 2013

Legislative Assembly of Puerto Rico
Post Office Box 902228
San Juan, Puerto Rico 00902-2228

Dear Senator:

The Puerto Rico Legislature is considering a proposal to increase the cigarette excise tax by $1.12.  On behalf of the hundreds of members and supporters of the Council for Citizens Against Government Waste (CCAGW) in the Commonwealth of Puerto Rico, I urge you to reject any efforts to raise taxes.

Increasing the cigarette excise tax by $1.12 would raise the price of a pack of cigarettes by fifty percent from $2.23 to $3.35 per pack.  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.

At a time of economic turmoil, politicians should be pursuing policies that offer taxpayers some relief, rather than imposing new burdens.  CCAGW urges all members of the Puerto Rico Legislature to oppose this proposal.

Sincerely,

Tom Schatz

President, CCAGW