Controversy surrounds cigarette tax

April 1, 2009 12:00:00 AM PDT
The price of almost everything sold in California went up a little on April 1, thanks to a one-cent increase in the state sales tax. Depending on the rate in your county, a $1,000 computer will cost $9 to $10 extra now. A $20,000 car will be almost $200 more. Also, if you smoke, a huge new federal tax went into effect Wednesday as well.SIGN-UP: Get breaking news sent to you

Cigarettes are getting hit by a double punch with the one-percent increase in the sales tax and a 62-cent increase per pack hike in the federal tax.

Tim Helwig of San Jose responds to whether or not he would pay the new tax or cut back on usage.

"Probably pay it. I mean, what am I going to do? Stop smoking? That's not going to happen," he said.

Retailers say manufacturers started raising prices one month ago in anticipation of a drop in sales. At Tobacco Outlet on Camden Avenue, customers who used to buy two cartons a month have cut back to one.

Prices can vary widely. For example, the price with taxes for a pack of Marlboro at a gas station in San Francisco was $5.98, at a discount cigarette shop in San Jose it was $5.04, and at a convenience store in San Jose it was $5.83.

At those prices the State Board of Equalization expects sales to fall, losing $8 million in excise taxes, but it will see a net gain of $4 million from the higher sales tax.

Roger Mukwana, a graduate student at San Jose State, accepts the sharp tax increase grudgingly.

"Picking on smokers is such an easy target. You know, you don't do this with milk or eggs or any other products because then it's more of an outrage," said Mukwana. "It's more acceptable as opposed to smoking, which is socially unacceptable."

The federal tax increase will help to extend coverage to four million children in SCHIP, the state children's health insurance program.

Professor Stanton Glantz, Ph.D., who heads the Center for Tobacco Control Research and Education at U.C. San Francisco, says there's no down side.

"The big increase on cigarettes is not going to do anything bad. It's going to generate a lot of money to pay for children's health insurance. It's going to reduce smoking. It's going to reduce exposure to second-hand smoke," said Glantz.

Non-smokers see a benefit, too.

"I hope that it makes people think about whether they want to buy a cigarette or not and hopefully it will help people decrease their smoking," said Heather Hellman of San Jose.

The cigarette tax is intended to raise money, but in its own way it could end up being an experiment in social engineering.

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