Cigarette tax to rise in South Carolina
Thursday, the state’s tax on cigarettes climbs to 57 cents a pack from its current 7 cents a pack.
Smokers can expect to cough up an additional $5 a carton.
Residents, retailers and health care advocates are split on the whether the increased tax, which will help pay for health care for the state’s poor, cancer research and smoking prevention and cessation programs, is a good thing.
“They should raise it to $10 per pack,” said Richard Lee, 58, as he manned the office at his auto repair shop, Richard’s Automotive, in West Columbia.
Lee points to a wall photo of himself and his brother who had a portion of a lung removed after years of smoking. Lee’s father and another brother died of lung cancer.
“Every bit they raise, it will keep people from smoking,” said Lee, who added he has never taken a puff in his life.
That’s what anti-smoking groups and lawmakers are banking on.
The increase is expected to prevent more than 23,000 S.C. children from becoming smokers and persuade 13,000 adult smokers to quit, according to the S.C. Tobacco Collaborative, an anti-tobacco group that includes the American Cancer Society and the American Lung Association, which have worked to increase the tax for the past decade.
There are gains for nonsmokers, too, they claim.
According to the Centers for Disease Control and Prevention, every S.C. household pays nearly $600 a year to cover tobacco-related health care costs.
“There is a huge direct and indirect tax burden to everyone in South Carolina, whether they smoke or not,” said Louis Eubank, director of the collaborative. “So what you’re talking about is a lessening of that burden. Plus, people will be healthier.”
Not everyone agrees.
Just steps outside of Lee’s office, one of his mechanics, David Davis, offers a different take on the tax increase as he works on a BMW.
“It’s ridiculous,” said Davis. A smoker for the past 20 years, Davis said he smokes 11/2 packs a day, depending on how long his work day stretches.
“Some people are going to stop smoking (because of the tax increase), and, eventually, the state will get less money,” he said. “And that will put some businesses out of business.”
Those same two reasons — the regressive nature of the tax and its effect on cigarette retailers — persuaded Gov. Mark Sanford and some state lawmakers to reject a proposed increase.
But in May a majority of lawmakers, faced with a looming $1 billion budget deficit, overrode the governor’s veto, ending South Carolina’s 33-year reign as the state with the nation’s lowest cigarette tax. Starting Thursday, South Carolina’s cigarette tax will rank 42nd among the 50 states and Washington, D.C. New York leads the nation with its $4.35-a-pack tax.
Since 2002, 47 states, Washington, D.C., and several U.S. territories have increased their cigarette tax to bolster state budgets and wean tobacco-addicted residents.
The federal government has taken up the tobacco tax habit too, increasing the federal tax by 62 cents a pack to $1.01 in April.
The double punch of state and federal cigarette tax increases could threaten the livelihood of some S.C. convenience stores, particularly those in counties that border North Carolina and Georgia, said David Jordan, marketing director of R.L. Jordan Oil Co., which operates 41 Hot Spot convenience stores in South Carolina. Cigarettes make up about 25 percent of the company’s sales.
“There is no other product that generates money and jobs like cigarettes,” Jordan said.
“We don’t know how much business we’ll lose to North Carolina and Georgia, but we know it’s going to happen,” he said, adding both border states will have lower taxes than the Palmetto State starting Thursday.
Jordan said his company anticipated a drop of 5 percent to 7 percent in cigarette sales when the federal tax was increased. The drop turned out to be more than 10 percent.
“Some stores right on the border will have to adjust to the way they do business. They’ll have to live on a lot less (profit) margin,” he said. “Some probably will go out of business.”
The higher price has smokers, including Claude Williams of Columbia, fuming too.
“They’re getting something over on us. Man, this is exactly why I need to quit,” Williams said as he recently finished off the last of a lunch-break cigarette.
But as Williams thought about it, he realized he wasn’t that upset.
“Who am I kidding?” he said. “I’ve got to have my Newports.”
Taxing smokers
Federal and state tax hikes on smoking will make the habit more expensive. A by-the-numbers look at the how the increase in cigarette taxes will affect smokers:
$4.09: The cost of a pack of cigarettes in South Carolina before on March 31, 2009
$4.71: The cost of a pack of cigarettes in the state after a 62-cents-a-pack federal tax increase
$5.21: The projected cost of a pack of cigarettes in South Carolina after the state’s cigarette tax is raised by 50 cents a pack on July 1
By GINA SMITH
Heraldonline, Jun. 28, 2010


