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Oct 22nd, 2007 - 15:49:07
Tuck said linking the two made sense because Mississippi has the third-lowest cigarette tax in the nation - 18 cents pack - and the highest state-imposed tax on groceries at 7 percent. Some municipalities in Alabama and Tennessee pay more than 7 percent for groceries, but not the states as a whole, according to the non partisan Center on Budget and Policy Priorities in Washington, D.C. Cigarette tax third lowest in nation According to Campaign for Tobacco Free Kids, only Missouri and South Carolina have a lower cigarette tax than Mississippi. The national average is just more than $1 per pack and the average of the major tobacco producing states is about 34 cents per pack. Tuck likes to say that decreasing the tax on food would help everyone because everyone eats. But reducing the tax on food would benefit low-income families the most because they pay the biggest percentage of their income for food. Tuck's proposal has been embraced by many Democratic candidates vying for office this year, including John Arthur Eaves Jr. in the governor's race and Jamie Franks in the lieutenant governor's race. "Raising taxes on cigarettes is something that needs to be done," Franks said recently. "It is a public health issue to me. ... "We can help every person by cutting the grocery tax in half. I find it quite appalling to live in the poorest state in the nation and pay the highest tax on food." Eaves agrees, saying on his Web site, "I believe it is wrong to charge hard-working Mississippians the highest tax rate in the country on basic food items, while I see tobacco companies preying upon our children." Republicans' views on the so-called tax swap proposal are mixed. Some, like Tuck, support it while others, including incumbent Gov. Haley Barbour and Auditor Phil Bryant, who is running against Franks for the open post of lieutenant governor, oppose it. Both Barbour and Bryant said they favor a comprehensive look at the state's tax system during the next four years. Bryant said the goal of the review would be "to ensure fairness and accountability." But as far as reducing the grocery tax, Bryant earlier said, "Absolutely - I would rather see a cut in the income tax. ...Everybody will pay the grocery tax. Not everybody will pay the income tax." The incumbent governor has not been as direct, but he has broached the issue. In an interview with another media outlet in May, Barbour said he supported taxing groceries. Last year during an interview with the Daily Journal, Barbour said, "Big tax-cut advocates" say "don't cut taxes on consumption. ...If you have to have more revenue, more taxes should be on consumption." Barbour, who has come under criticism for being a tobacco lobbyist in Washington, D.C., before being elected governor in 2003 and has continued to face questions about possible links to the lobbying firm, has indicated he might be amenable to looking at increasing the cigarette tax during the next term if it is part of an overall tax cut. During his first term, Barbour said he blocked raising the cigarette tax because he pledged during the 2003 campaign to be "against raising anybody's taxes." When asked if he might support a hike in the cigarette tax during the upcoming four-year term, Barbour said, "some might be adjusted upward to cut some others more if we found that is the fairest thing." Eaves has charged Barbour with making vague election-season commitments that he does not intend to honor because the governor knows that a majority of Mississippians support increasing the cigarette tax. Bryant has made his own promises in regards to the cigarette tax, but even he left himself some wiggle room. Bryant has repeatedly said he opposes increasing the cigarette tax, but he did say recently that as lieutenant governor, "we're going to let other senators have opportunities to introduce bills and we will see what that brings." As governor, Barbour was able to block passage of the tax swap legislation for two years by vetoing it twice in 2006 and convincing Senate Finance Committee Chairman Tommy Robertson of Moss Point, who was defeated in the Republican primary in August, not to bring up the proposal in the 2007 session. Barbour has said that one reason he opposes the tax swap is that no studies have been done on the impact of the proposal. Actually, the Stennis Institute of Government at Mississippi State did a comprehensive study. And Barbour's own state Tax Commission, based on its estimates, has said that the 7 percent tax on groceries represents about 15 percent of all sales tax revenue collected in the state. Most retail items, like groceries, are taxed at 7 percent. The tax would remain 7 percent on all retail items except groceries. Long-term impact not studied During the first year of the proposal, the Tax Commission estimates the tax swap would result in a small net increase to the state general fund, though the Tax Commission did not study the long-term impact of the proposal. Proponents of the tax swap argue that the tax swap would be a boon because the money saved on the purchase of groceries would be spent on other retail items taxed at 7 percent. Plus, the expected decrease in smoking ultimately would result in a savings to the state because Mississippi spends literally millions of dollars each year treating smoking-related illnesses. The Stennis study also said the tax swap would result in additional revenue for some municipalities, using the same principle that taxes saved on groceries would be used to buy other items. Plus, the legislation has been written to ensure that no municipality would lose funds. Under current law, municipalities are reimbursed by the state 18.5 percent of the grocery taxes collected within their border. Under the tax swap proposal, which cuts the grocery tax in half, the reimbursement to the municipalities is doubled to 37 percent. Proponents said the intent of the increase to the municipalities is to ensure that it is revenue neutral so that cities and towns do not have to increase property taxes to offset lost revenue. © Copyright 2006 by DiscountCigarettesBox.Com Top of Page |
