Increase in Cigarette Tax To Result In $149.2 Million Revenue Loss
If you look at page 103 of the 2007 Budget in Brief you’ll notice the state anticipates a $149.2 million reduction in cigarette tax revenue based on the 35 cent tax increase. This is most curious considering the state has had revenue increases each year from the cigarette tax up until now.
This is a paradox, isn’t it? The tax is going up, but the tax revenue is expected to go down. An increase in taxes resulting in a decrease in tax revenue is contrary to the progressive laws of economics. Just ask Thurman Hart, he’ll explain it to you.
However, for those grounded in reality and familiar with revenue implications of tax increases, it's obvious the increase in New Jersey’s cigarette tax is an attempt at social engineering and has nothing to do with “closing the budget gap”. Actually, the cigarette tax increase is one of Governor Corzine’s “hard choices” spending “cuts’.
Aside from the loss in tax revenue, can the state afford the extra costs associated with law enforcement to combat the additional smuggling rings and the unsavory characters this “revenue raiser” reducer will bring to the state?
Yes, we know if Governor Corzine was cornered with the truth he would say he is raising the tax for the smokers' own good. And he’d probably say down the road it will save on health care bills, but he didn’t say any of that. He “framed” the cigarette tax increase as a “revenue raiser” to mislead the public, just as he has with almost the entire 2007 budget.