By Joy Blankley Meyer
Like every other state, Pennsylvania has a tax on cigarettes. Unlike most other states, Pennsylvania does not tax other tobacco products - including cigars, bidis, snus, and snuff.
Fortunately, Gov. Rendell has taken a huge step in the right direction by proposing to close this loophole and start taxing these other tobacco products.
Unfortunately, the proposal is flawed. In his 2009-10 budget, the governor has proposed a tax based on the weight of the products. But the weight-based tax could actually boost profits for some of these products. Is that the goal of a tobacco tax? Not so much.
Fortunately, Rendell can fix this flaw easily. Instead of taxing such tobacco products based on their weight, the state should base the tax on a percentage of the wholesale price.
Some tobacco companies are pushing for a weight-based tax to help wipe out their competition and get kids addicted to a whole new generation of smokeless tobacco products. That's because they are now selling ultralight tobacco products that are smokeless, spitless, and able to dissolve in the mouth like candy.
These products would be lightly taxed under Rendell's proposal, keeping their price very low and making them more accessible, especially to youths.
We tax tobacco for two main reasons: First, to discourage people from using it - pushing them to quit or at least cut back. This is particularly true in the case of young people.
Second, we tax tobacco to make money for the state.
These reasons apply to smokeless tobacco just as much as they do to cigarettes. And the evidence shows that adding a price-based tax to noncigarette tobacco products would be more effective both in decreasing tobacco consumption and in increasing the revenue stream for the state.
Let's look at the health reasons for a price-based tax on other tobacco products. Tobacco use (cigarettes and other products combined) kills nearly a half-million people in America each year, including more than 30,000 in Pennsylvania. By decreasing tobacco use, we can save thousands of lives every year. And that doesn't even count the number of people whose lives would be better - free of asthma, lung cancer, and myriad other diseases.
Increasing the prices of tobacco products by 10 percent reduces adult consumption by 3.7 percent, and male youth consumption by 5.9 percent, according to the Campaign for Tobacco-Free Kids.
Some may argue that other tobacco products aren't as harmful as cigarettes. That's not true. Smokeless tobacco is as addictive as cigarettes, and users are 80 percent more likely to get oral cancer than nonusers are.
Pennsylvania is particularly hard-hit by these other tobacco products. Seven percent of adult males in Pennsylvania use smokeless tobacco - more than double the national average of 3 percent. And 15 percent of our high school students have experimented with smokeless tobacco, making them prime candidates for more severe nicotine addiction when they are adults.
How will a tax on these products affect our state's bank account? Conservatively, Pennsylvania could generate about $70 million a year from a price-based tax. That would go a long way toward balancing the state budget.
The price-based tax would also prepare us for the future by automatically keeping up with inflation and price increases.
Ultimately, it's appropriate for all tobacco users to pay taxes. Tobacco use costs the nation $96 billion a year in health-care costs. Pennsylvania spends $5.2 billion each year on smoking-related health care.
It's great that the governor and our legislators are finally moving to close this loophole in Pennsylvania's tobacco tax law. We just hope they'll consider the price we'll all pay if they go with a weight-based tax.