American Forum

KENTUCKY FORUM

By Terry Brooks

Newspapers, blogs, and the radio airwaves have been awash with comments regarding the governor’s proposal to increase the cigarette tax rate by 70 cents a pack. Many comments, paraded as fact, are simply not true.

To set the record straight, let’s be clear: having one of the lowest cigarette tax rates in the nation is bad for Kentucky businesses, and not the opposite. The main reason is that having the highest rate of adult smokers in the nation increases the costs that businesses pay to provide health insurance to their employees by $1.5 billion every year. Additionally, there is a cost to businesses of $2.1 billion in lost productivity. For this reason alone, the low cigarette tax rate and the high smoking rate make Kentucky a less than desirable place to do business. Certainly this is the crux of the reason that the Kentucky Chamber of Commerce supports a higher tax rate on cigarettes.

Second, if we truly care about low-income smokers’ pocket books, let’s help them quit smoking so that they can spend their money on more important items than cigarettes. The 70-cent increase is predicated on the fact that many smokers want to quit and a high cigarette tax increase is proven to give them the incentive to finally break the habit. For this reason, the only tax increase that is truly burdensome to smokers is one that is low enough to not provide any economic incentive to give up a costly habit.