Smokes and Mirrors – What’s Up With Tobacco Taxes?

by Steve MacDonald

All across the the Granite State Democrats have gathered in their secret underground lairs.  The unthinkable has happened.  Tobacco revenues were up last month.   (Audible Gasp!).  That’s right.  Revenues beat estimates.

This is, of course, a double edged sword for the liberal left.   When their grotesque estimates (overall) were forever coming in under target, how many times did they say, “it’s just one month, wait and see.  Give it time, they’ll come around.  We’re not that far off.” No such quarter for Republicans. ( Typical hypocrats.)   At the ugly end of the 2007 to 2010 Democrat “experiment” they were off by about a billion dollars which might suggest they have no clue what they are doing.

But when the Republican’s estimated revenues for their budget the Democrats cried and whined anyway as if they were suddenly experts; the religious left even gathered to pray for more spending.  I’m not kidding.  They prayed for more spending.  The left claimed repeatedly that Republican estimates were purposefully low to punish people.  That is what the left said.

But the overall estimates are close.  Very close.  This means the Democrats were wrong about Republicans underestimating revenue on purpose, which means they were themselves wrong about estimates again (no surprise there).  With revenue nearly in line with spending, bitching about it makes them look petty and just reminds everyone what wretched stewards they were of our tax dollars.

So left hanging without an economic axe to grind they have bet their rhetorical money on the cigarette tax cut.  But they may have lost that bet as well.

In February tobacco revenue was reported to be $900,000.00 over projections.  In April, it was above projection by close to a million.  (That’s $1,000,000.00).  In between tobacco revenues were down.  Lottery, gaming, liquor and beer, over the entire budget cycle, are all below protections.  Sales on all these items are down across the board.  It’s not just tobacco.  The message from the secret lair however is that the tobacco tax cut was irresponsible, but given the economic climate (created by Democrats, by the way), and the poor overall performance in the sin tax sector, tobacco revenue is actually doing fairly well.

Would the Democrats like to now argue that cheaper cigarettes are costing us tax revenue in beer, liquor, lottery and gambling receipts?

“Yes, we see a pattern where, during these economically depressed times, people are flocking to higher tax states to get as little for their dwindling dollars as they can.”

How about “they are doing what people always do when they have less money”–doing with less.  Oh, sorry.  We’re talking to Democrats.  When they have less they always spend more, or tax more, and then more, and more, and more.   But outside the liberal ghetto of the left wing mind real people have to make sacrifices and driving to New Hampshire to save a few bucks might not be cost effective right now.  Why?  How about gas prices?   Perhaps our current energy policy and a weak dollar have made the cost of traveling to and from New Hampshire to save a few bucks untenable.  (See, I told you we should have lowered the gas tax.)

Let me save you some time.  Democrats don’t care.  They’ve got talking points to talk about.  Dwindling tobacco taxes are killing unwed mothers and fatherless children and old people with brain disorders.  No answers, no past experience to run on, just scare tactics.

When was the last time a New Hampshire Democrat lowered a tax or spent less on government?  How about never.  To a Democrat balancing spending with revenue is the equivalent of fiscal hate speech.  Government can never get smaller, those bureaucrats and their unions finance their campaigns and vote for them.  They need that money and those votes, so screw you.  And for four years they did.  Hard.  And no amount of Tobacco taxes (which they raised several times) would have ever covered up the gross fiction of left wing revenue estimation, a felonious event they continue to perpetrate even when out of power.

But undeniable truths will not be silenced. Democrats were wrong about revenue estimates when they were in power,  Governor Lynch was wrong as usual with his budget, and if the Democrats were still in power now they’d be wrong to the tune of a few hundred million more, heaped onto the backs of people who clearly do not have extra money for liquor, beer and cigarettes, and would have even less under the yoke of the Democrats ever rising tax burden and grow government first agenda.

New Hampshire Republicans took a very bold and responsible approach to the budget, one that people are clamoring to see in Washington.   They provided relief on a dead end tax that disproportionally hits lower income earners but at least presents an opportunity to stimulate other forms of commerce, something no tax increase will ever do.  The Republicans estimated revenues in a way that avoided putting additional state tax pressures on small businesses and struggling citizens, while removing others.  And then only spent what they thought they’d have.  So far that’s worked out pretty well, and Democrats hate that.

We cant overcome the Democrats failed economic policy and disastrous energy policy agenda overnight.  New Hampshire can’t drill for its own oil.  So we have to do the best we can until we can do better.  And we are doing better.  And Democrats hate that.

And while the progressives would like to see gas prices come down for their buddy Obama, odds are very good that this price signal could encourage people from outside the state to use those savings to save even more on cross border sales of cigarette’s, beer, liquor, and lottery tickets, and Democrats don’t want to see Republicans proved right.

If the tobacco revenues eventually come it at or above projection, at the end of this fiscal experiment, all the left will have left is that $72,000.00  dollar taxpayer funded luxury remodel of the bathroom next to former Democrat House speaker Terie Norelli’s office (in the middle of the worst recession in history™ ), and another chapter in New Hampshire politics where they were completely wrong about the budget–again!

Let the New Hampshire Democrats scream at the darkness.  Everyone else, feel free to ask for a light.

You are reading "Smokes and Mirrors - What's up with Tobacco Taxes?"  by Steve Mac Donald originally posted at GraniteGrok.com.(Home)

How About Some Cheese With You Hamm?

If the democrats in New Hampshire want anyone to take them seriously on why we should not lower the cigarette tax, they had best find a better spokesperson than House rep. Christine Hamm from the Peoples Republic of Hopkinton.(PRH)

From this mornings union leader..

Rep. Christine Hamm, D-Hopkinton, argued against the change. She said no state has seen tobacco tax revenue increase after a tax cut.

“This is yet another expensive exercise in futility,” she said. When it comes to tobacco, she said, “Every tax hike produces new revenue, and every tax cut reduces it.”

Oregon tried a 10-cent cut, and saw revenues fall by 10 percent, she said.

“To do the same thing would be fiscally stupid,” Hamm said

You know what else is stupid?  Listening to Christine Hamm.  Oh, and comparing Oregon to New Hampshire?  There are almost no demographic similarities, the most important of which is the sheer size of Oregon and the proximity of neighboring states which are also huge.

No one is driving across Washington State, or up from California, or Idaho, or anywhere else to buy cigarettes in Oregon.  Only Washington State taxes them more (the last I checked.) No incentive, no gain.

But here in New England, where people can buy almost everything cheaper in New Hampshire, the classic New England maxim does not apply--"you can get there from her," or here from there, and they do.  People shop here from other states to save money.  So reducing taxes on cigarettes (or anything else) gives them one more incentive to make the trip or to buy more while they are here.

Need proof?

Raising the tax already cost us revenue.  Last August Maine announced that it's sales had increased 20%.  That is most likely money that used to get spent here but which the tax hike diverted back to Maine. (I wrote about it here)

And more Proof?

Hamm is the taxer in chief, and coincidentally was the author of HB1479 which would tax all tobacco products, so she's got an emotional attachment to the tax.  You know how liberals are about their feelings.

But that is hardly her best work.  Her eponymous HB 925 "FN-A," taxapalooza bill from 2007 was like tax and spender porn...

This bill:

I. Taxes property which is not primary residential real estate at twice the rate of primary residential real estate under the local property tax.

II. Establishes a luxury sales and use tax on motor vehicles costing $30,000 or more and any item costing $10,000 or more.

III. Establishes a tax on entertainment admission charges.

IV. Establishes a tax on gambling winnings.

V. Expands the definition of tobacco products subject to the tobacco tax.

VI. Changes the method of calculating the beer tax to a method based on price rather than volume.

VII. Establishes a tax on estates exceeding $3,000,000, excluding certain farm property.

VIII. Establishes a payroll tax on businesses with payrolls exceeding $10,000 per week.

IX. Changes the rate of the statewide enhanced education tax.

X. Dedicates revenues from the taxes established in this bill to the education trust fund

Christine knows taxes, and how to use the word "education" to get them.   Taxes that are easier to increase as the mood, I'm sorry "need" arises.  And Hamm had needs.  Being on the Ways and Means Committee, she is acutely culpable for the unbalanced out of control spending and the insanely inaccurate revenue projections fabricated to hide it.

The result of that economic genius is that we need to find about $1,000,000,000.00 dollars in cuts to cover existing democrat spending in our next budget.  Talk about poor judgment.

So yeah, we are all prepared to continue listening to Christine Hamm from the PRH about taxes and revenues a problem we might have avoided had she hails from a liberal Ghetto.  Comparing New Hampshire to Oregon is just more evidence of the rhetorical insanity democrats will go to to take money from people, and their ignorance about the affect of taxes on behavior when the demographics and geography work in your favor.

One more bit of proof about taxes and the uniqueness of the New Hampshire Advantage and lower taxes?

Vermont.  Our lack of taxes has been a boon to growth that democrats just can't accept.  Lower taxes always create more commerce.  More commerce equals more revenues--without raising taxes.  Incentives to attract commerce will net us more than the increased tax ever would.

So Hamm is serving us left wing cheese.  And you don't have to bite--unless you are a liberal, then you probably can't help yourself.

"Snap!" 

Cross posted