Minnesota GOP’s Tobacco Tax Cut Is A Killer, Literally

There is a lot to dislike about the Minnesota Republicans’ tax cuts that were recently signed into law. For instance, increasing the estate tax exemption from $2 million to $3 million is an unnecessarily lavish gift to about 1,000 Minnesotans who won the birth lottery by being born into a relatively wealthy family.  Overall, the Republicans’ tax cuts will compromise Minnesota’s future fiscal stability by reducing state revenue by more than $5 billion over the coming decade. This is a particularly reckless move at a time when President Trump and his Republican congressional supporters are proposing to shift billions of dollars in future costs to states.   The next time Minnesota has a budget shortfall, remember the Republicans’ 2017 tax cuts.

But the stinkiest of the Republicans’ tax cut stink bombs was their tobacco tax cut, because in the coming years it will cause suffering and death.

Think that’s hyperbole?  A mountain of research shows that every time tobacco prices increase, tobacco consumption decreases. The corollary is also true – tobacco consumption increases when tobacco prices decrease.

This is particularly true when it comes to price-sensitive young Americans.

Here’s why that matters:  When tobacco consumption increases, tobacco-related suffering and death increases. Though we don’t hear about it as much as we used to, tobacco use remains the leading cause of preventable diseases and death in America. It causes a variety of deadly cancers, lung diseases, and heart diseases, among other serious health problems.  If you’ve ever seen anyone suffer from one of these illnesses, I promise you will never forget it.

If you don’t believe the legion of public health and economic researchers about tobacco taxes decreasing tobacco use, listen to the tobacco industry executives themselves. In a previously secret document that got disclosed during lawsuits, an executive from Philip Morris, the makers of Marlboro cigarettes, said:

“Of all the concerns, there is one – taxation – that alarms us the most. While marketing restrictions and public and passive smoking [restrictions] do depress volume, in our experience taxation depresses it much more severely.”

Likewise, an executive from RJ Reynolds, makers of Newport and Camel cigarettes, came to the same conclusion:

“If prices were 10% higher, 12-17 incidence [youth smoking] would be 11.9% lower.”

So if Republican legislators think their tobacco tax cut is doing a favor for Minnesota smokers, they couldn’t be more wrong.

Yes, financially speaking, the tobacco tax is regressive. That is, the higher costs of tobacco products that result from tobacco taxes disproportionately impact the pocketbooks of poorer Minnesotans.

But that’s not the end of the story, because the reduction in tobacco-related suffering and death that comes from higher tobacco taxes is progressive. That is, the life-saving health benefits associated with higher tobacco taxes disproportionately flow to poorer Minnesotans.  And by the way, the millions of dollars in savings from not having to pay as much to treat those tobacco-related diseases flow to Minnesota taxpayers and health insurance premium payers.

The bottom line is that cutting tobacco taxes, as Minnesota Republicans did this year, has two major impacts. It causes tobacco executives to profit more from increased sales, and it causes our family members, friends, and neighbors to suffer tobacco-related diseases.

Therefore, when it comes to tobacco taxes, Minnesotan leaders have to be cash cruel to be clinically kind. If the DFL Party wins control of the Minnesota Legislature in 2018, increasing tobacco taxes must be at the very top of their agenda.

Conflicted About the Tobacco Tax? Listen to the Tobacco Lobby

The debate at the State Capitol over increasing the tax on tobacco has played out the same way year after year.   It goes like this:

Public Health Claims.  Public health advocates point to price elasticity research showing that taxing cigarettes, and thereby increasing the cost of cigarettes, is the most effective way to motivate smokers to quit and prevent teens and young adults from starting down the path to addiction.  Consequently, increasing the tax on tobacco is the single most effective way to reduce tobacco-related death and suffering, and the related costs. Continue reading

Norm Coleman To Return To His DFL Roots?

Former St. Paul Mayor and U.S. Senator Norm Coleman is nothing if not flexible.

  • When  leftist radicals were de rigueur in the 1960s, Norm 1.0 was a leftist radical.
  • When Skip Humphrey and Bill Clinton were on top of the political world, Norm 2.0 clung to them and the rest of the Democratic establishment.
  • When the easier path to higher office appeared to be through the GOP, Coleman retrofitted into GOP Norm 3.0.
  • When the Tea Partiers became power brokers, Norm 3.0 dutifully donned a tri-corner hat, formed a Super PAC to fund Tea Party-backed candidates, and endorsed Tea Party darling Michele Bachmann for, I kid you not, Vice President.

Then in 2012,  the going got tough for Senator Coleman and Tea Partiers, so the tough got a poll. In a St. Paul Pioneer Press commentary this week, Coleman advises Minnesotans  that he is in possession of scientific evidence indicating that “Minnesotans are not anti-government.” Continue reading

Star Tribune Survey Delivers Mixed News for Dayton Tax Package

For Governor Dayton’s bold package of tax increases, there was more good news than bad in the Star Tribune’s Minnesota Poll, released yesterday.

Bad News for Dayton

  • Bye Bye Professional Services Tax.  Only 28% of Minnesotans support a sales tax on business services.  With only 36% of DFLers supporting this idea, and an army of special interests mobilized against it, this part of the Governor’s budget is in deep political trouble. Continue reading

The Five Best Things About Dayton’s Budget

Governor Mark Dayton went big and bold this week.  He took on the most powerful special interests in order to fix Minnesota’s chronic structural budget deficit problem.  Recent Minnesota Governors haven’t had the guts to do that.  This governor did.

The nitpickers are busily picking nits in Dayton’s proposal, and it’s not a perfect proposal.  But when you focus on the big picture, there is much to admire: Continue reading

Tom Horner’s Revenge

Don’t you dare feel sorry for 2010 Independence Party gubernatorial candidate Tom Horner.  Yes, because of his electoral set-back Horner doesn’t have the Governor’s bully pulpit to promote his center right ideas, though he does have his new non-profit, NextMinnesota.  And of course, he isn’t able to exercise the gubernatorial power to pardon turkeys.  That still has to sting a little.

But according to this weekend’s Star Tribune, the tax reform agenda that will be put forth by Horner’s DFL opponent Mark Dayton in 2013 may look a whole lot like the platform that Horner ran on in 2010. Continue reading