A tax that's too low

Washington Post: At a candidates forum in Arlington, Va., the other night, one of the no-more-taxes-no-matter-what candidates was critical of State Sen. Mary Margaret Whipple, D, for supporting certain tax increases. She replied that there is one large tax-increase proposal she is especially "proud" to have pushed -- and will push again if she is returned to Richmond: a 60-cent boost in Virginia's laughable, lowest-in-the country 2.5-cents-a-pack cigarette tax. Her reply drew hearty applause, as well it should have. If the General Assembly does nothing else to straighten out Virginia's tax structure, a dismayingly likely possibility, at least it ought to do something about the cigarette tax.
Two for one
Even increased by 60 cents, Virginia's tax still would not approach the $1-a-pack rate in the District of Columbia and Maryland. Ms. Whipple and other members of the Senate Finance Committee who supported a bill this year cited estimates that it would raise $350 million annually at the outset. States that have raised their cigarette tax rates significantly have enjoyed not only substantial revenue increases but also some reductions in smoking levels and related health care costs, according to the Campaign for Tobacco-Free Kids and other supporters of cigarette tax increases.
Obviously if the cigarette tax were to do what is intended, which is to discourage people from smoking, the revenue yield would decline. But the savings in health costs could be great, according to campaign officials. Health care costs in Virginia directly caused by smoking are $1.62 billion annually, a state and federal tax burden of $508 per household from smoking-related government expenditures. At this point, 16,000 children under the age of 18 in Virginia become smokers each year.
The bleats of Big Tobacco ought not to cow Virginia lawmakers anymore. A state that taxes food at a higher rate than nicotine has topsy-turvy priorities.