THE GAZETTE
Wednesday, November 13, 2013 o
Page A-15
Let’s butt out
During election years Maryland politicians promise tax cuts. Then, after the election, they spend the next three years raising taxes until the next election year when the cycle repeats itself. An exception to this phenomenon is the cigarette tax, the ugly duckling of taxes, which most voters support. So it wasn’t surprising last week when antismoking activists called for a $1 a pack increase in Maryland’s cigarette tax, an increase to $3 a pack (the highest tax in our five state region and 10 times higher than Virginia’s 30 cents a pack). And they want state lawmakers to act next January, in the middle of an MY MARYLAND election year. BLAIR LEE The antismoking crusaders say the tax isn’t meant to raise revenue, it’s meant to make cigarettes so expensive that people quit. It’s true that boosting taxes doesn’t raise a lot more revenue. Maryland’s cigarette tax was 36 cents a pack in 1999. Since then it’s been increased three times to $2 a pack, more than a 450 percent increase. Yet revenues haven’t kept pace. When the tax doubled in 2008, revenues only increased 51 percent. Since then there’s been a steady drop in state cigarette tax proceeds. So, is taxation driving the tobacco industry out of business? Are fewer Marylanders smoking? Maybe, the number of cigarettes sold here dropped from 243 million in 2008 to 200 million in 2012. This is proof positive say the antismoking folks that their tax-it-to-death plan is working. Maybe, but measuring Maryland cigarette sales doesn’t account for cigarette smuggling which, thanks to the tax hikes, is on the rise. A January 2013 Tax Foundation report ranks each state by its estimated amount of cigarette smuggling. Maryland ranks 13th with smuggling accounting for 26 percent of cigarettes consumed here, up from 10 percent in 2006. New York, with its $4.35 per pack tax (an additional $1.50 in New York City) comes in first with a 61 percent
smuggling rate. An Ocean City smuggling ring was recently nabbed smuggling 1 million cartons from Virginia to New York. By my math these guys were looking at a $41 million profit. According to Jeff Kelly, a Maryland cigarette tax enforcement officer, some heroin and cocaine dealers are switching to cigarette smuggling because it’s less risky, easier and just as lucrative. Tobacco smuggling has a rich history. The first American tobacco was grown in 1612 by Virginia planter John Rolfe from tobacco seeds he smuggled into the colony from Venezuela. Tobacco growing soon spread to Maryland where it became the foundation of the colony’s economy for the next 150 years. Port Tobacco in Charles County became Maryland’s second largest seaport (today’s population is 13) and in 1637, tobacco was declared the official currency. Colonists bought goods and paid their debts and taxes with tobacco leaves. But most ironic was tobacco’s widespread popularity in Europe because, doctors believed, it was good for smokers’ lungs. Today, tobacco has fallen from grace. The war on tobacco is being waged by raising taxes, curbing advertising, limiting smoking venues and by peer pressure. In 1999 Maryland launched a tobacco buyout program paying tobacco growers who converted to other crops. Of the state’s 1,000 growers, 845 participated and today tobacco auctions are largely a thing of the past. So, here’s my question: Why prolong the agony? Smokers have been reduced to social outcasts. They huddle like lepers in the freezing parking lot sucking on their $7-a-pack cigarettes. Why not just outlaw cigarettes the same way we’d outlaw any other dangerous drug? Imagine if tobacco was first introduced today instead of 400 years ago. Picture the industry’s FDA presentation: “We’d like you to approve an inhalant that has no redeeming value but is addictive and often causes lung cancer.” It wouldn’t have a chance. Heck, even electronic cigarettes, the new non-tobacco fake cigarettes, are having a tough time with the FDA. A libertarian by nature, I don’t like government officials who think they’re better and smarter than me telling me
Another event from The Gazette
Don’t scale back the bag tax
what to eat and drink or what health insurance I must buy. But protecting us from addictive, fatal substances falls well within the government’s purview. So, instead of taxing it to death, which only promotes widespread smuggling, let’s put a bullet in it. Let’s figure out a realistic, equitable tobacco ban. The anti-smoking zealots are fine with an immediate, outright ban because, having battled the tobacco industry all these years, they view it as the Evil Empire which must be punished. Like most moralists, they don’t live in the real world. In fact, the only argument for tobacco is its 400-year evolution into a global industry with $90 billion in U.S. sales last year. Abruptly ending those jobs, investments and revenues would cause economic chaos. So phasingout tobacco over a reasonable period is step one. If tobacco’s days are numbered, let’s start numbering them. And perhaps Maryland’s successful experience converting tobacco farmers to other crops is a model for the larger tobacco industry. If e-cigs don’t have health dangers, that’s one conversion path. The e-cigs use a tiny battery that vaporizes a solution which is then drawn through a nicotine cartridge. “Smokers” get the nicotine without the tobacco and its harmful effects. The health zealots oppose e-cigs as a “gateway” to tobacco smoking that produces “secondhand vapor.” That’s the unhelpful, hardline approach. If harmless, e-cigs could be a godsend for smokers and the industry and should be welcomed instead of taxed and regulated like tobacco. Another conversation path, and I’m not kidding, is the coming legalization of marijuana. If this nation has its heart set on switching from tobacco to pot, why not put the tobacco industry in charge? Lord knows they’re set up for it. After all, that’s where we’d be today if, back in 1612, John Rolfe had smuggled in different seeds from Venezuela. Blair Lee is chairman of the board of Lee Development Group in Silver Spring and a regular commentator for WBAL radio. His column appears Fridays in the Business Gazette. His past columns are available at www.gazette.net/blairlee. His email address is blairleeiv@gmail.com.
The League of Women Voters of Montgomery County was proud of the County Council for its leadership in passing the comprehensive bag tax that took effect on Jan. 1, 2012. This act recognized that local governments can play an important role in protecting and managing our natural resources — including streams, rivers and the Chesapeake Bay. Consequently, the league was quite disappointed to learn of the submission of Bill 10-13 (titled “Taxation-Excise Tax Disposable Carryout Bags-Scope”), which would dramatically narrow the scope of the bag tax and reverse some benefits of the original bill. We wish to share with The Gazette and county residents some of our concerns. We hope that the County Council will recognize that taking such action would be extremely premature. The bag tax has been in effect for about 18 months — and without much publicity. County residents are still becoming accustomed to its requirements and may need more time and publicity to achieve more thorough compliance and to become comfortable bringing their own reusable (and washable) bags whenever and wherever they shop, while accepting such simple routines as laundering reusable bags. Narrowing the scope will conflict with and contradict the farsighted Climate Action Plan approved by the County Council — you see, plastic is a petroleum product that in both its production and destruction emits carbon dioxide (increasing our carbon foot-
print) and other air toxins. Narrowing the scope could also result in more costs for cleaning up trash, maintaining facilities and possibly requiring additional staff to do so. Despite rumors to the contrary, visual and physical pollution of county paths, roads, byways and streams — particularly with plastic bags — continues. Some League members have even seen them entangled in the tops of county trees. These bags also clog our stormwater management infrastructure, are costly to remove, and are hazardous to our wildlife. In addition, the 5-cent charge serves as a reminder of the negative environmental and economic impacts plastic bags have — thus inculcating an awareness of these problems (albeit at a far lower cost than in Ireland, where in 2009 the charge was 35 cents). Maybe we should consider charging more. We ask the county to join the league in supporting and retaining this sensible and important control over the pollution of our resources and in promoting more policies that protect our resources by reducing pollution. The league has long supported the County Council’s “reduce-reuserecycle” hierarchy and hopes that the County will continue to promote and strengthen these efforts — rather than weaken them — which is what Bill 1013 will do.
Linna Barnes, Chevy Chase The writer is the president of the League of Women Voters of Montgomery County.
Gazette needs to recognize other holidays The Gazette publishes on the front page happy photos and articles featuring Christmas, Easter, Jewish holidays, Halloween and the return of the spring blossoms. Until you realize that Norooz, Eid and Diwali are being equally joyfully celebrated by an increasing number of people and report on them on the front page (as opposed to a back page), neither the government nor the people in general will see the slighting of the holidays by the county public schools as a problem. Norooz is one of the most important Persian holidays, regardless of the religion of the immigrants. However, it
routinely falls during the county’s MSA spring testing schedule and both students have staff have to make the hard decision of whether to celebrate the holiday and miss work school at a time they are told no absences are allowed. I am happy to have my (Jewish) holidays recognized, though sometimes misunderstood. Until The Gazette does a better job of informing the public at large of the other annual cultural celebrations, there will not be a big shift in the government, nor in the support of the constituency. So, get with it, Gazette!
Angie Loomis, Chevy Chase
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