Thursday, March 12, 2009
Cigarette prices increase
Recently I went to buy a pack of cigarettes, and I noticed that the brand I usually purchase were priced abnormally high. I ended up buying a cheaper kind. When I returned home, I was curious as to why the prices rose so much, so I did a little research. Ted Strickland just approved a tax-increase bill that will raise the price on cigarettes. Ohio is doing this to (potentially) eliminate our states $1.75 billion debt. I personally don't agree with it and believe our state should eliminate our debt through other means, however, raising the taxes is a valid way to help lower the states debt by hopefully $73 million a year. Although that is a small chunk out of the 1.75 billion, it still helps. I thought back to class, and realized that this is an example of how our states overspending put ohio in debt. I wonder if Obama being in office has anything to do with it. Not that i oppose it, but if he is lowering taxes in some areas, could that play a role in the rise of taxes in other areas, like cigarettes?
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thankfully, oregon and not ohio is proposing a 1900% increase in beer tax. Oregon state is currently facing this ridiculous increase in tax. It would be unfortunate to see taxpayers pay more for beer than the overall revenue beer would bring into the economy. One positive in this effect would allow more money to alcohol treatment and prevention. It would however cause riots here in columbus town, or in any college town for that matter.
ReplyDeleteThats interesting, Another source i found said that the some of the tax money on cigarettes is going to go to the prevention of smoking. Its almost like the tax is good for us, gives us more of an incentive to quit.
ReplyDeleteI find this idea of a good Samaritan type of tax interesting. We all know that higher price means a lower quantity demanded, and therefore, if there is a higher tax on cigarettes, the demand will be lower. This tactic seems similar to tariffs in a way, except the goods being taxed are all within the borders of the country. The government thinks that it would be good for smokers if they stopped smoking, and they feel that they can be involved in making them stop. Hence, they raise the taxes on cigarettes, causing a decrease in the amount of smoking taking place, and make a little money for the government at the same time.
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