But the tax hike has to be considered in context, not evaluated in isolation.
The biggest factor to consider is that this will not be the only tax increase this session of the General Assembly. Gasoline taxes are being hiked, and an additional registration fee will be put on vehicles. Indiana legislators are rightly proud of the state’s record of low taxes. They have to be concerned about how much damage they care to do to that reputation in a single year.
Another factor is how the state compares with neighboring states. Cigarette commerce at the borders might not be significant in the grand scheme of things, but it matters a great deal to the business people involved. Legislators should try to keep business at the border coming this way, not going the other way. Indiana’s cigarette tax is currently 99 cents a pack. Increasing it by 60 cents would put us in line with Ohio’s $1.60 a pack. The tax is $1.98 in Illinois and $2 in Michigan.
Yes, an increase in the cost of cigarettes is one of the most effective ways to reduce the rate of smoking, especially among young people. As Nancy Cripe of Tobacco Free Allen County pointed out on this page last week, 20.9 percent of adults in Indiana are smokers, a rate worse than all but three states.
But that’s not the only consideration there is. The state is juggling a lot of dollars this year, among other things trying to fund a $1 billion-a-year infrastructure program without cutting anything vital from other programs. The cigarette tax increase is but one part of that gigantic balancing act, and getting it right or wrong will have effects in many other areas.
So, tax supporters, take your 60 cents this year, and come back for more another time. That’s the way it works.