May 15, 2008
Rise in ‘Sin Taxes’ Wrong Way to Fund Priorities
Gov. Mike Easley has what he calls a “painless solution” to increase teacher salaries and fund mental healthcare: higher taxes on cigarettes and alcohol.
In his last budget proposal as governor, Easley would have lawmakers increase the tax on a pack of cigarettes by an additional 20 cents to 55 cents total. The increase of cigarette taxes would pay to raise the average salary for teachers in our state up to the national average of $50,000 a year.
Higher taxes on cigarettes are bad news for NC tobacco workers already facing layoffs and plant closures as domestic production continues to decline.
Easley’s budget also calls for raising the tax on beer 4 cents a can, on wine 3 cents a bottle, and on liquor 4 percent. The governor’s budget would use these increases to fund changes in mental-health care reform.
While we support higher teacher pay and improvements in the mental health care system, we strongly oppose these proposed tax increases and are lobbying against them. Since this is an election year, many legislators appear reluctant to raise taxes. An article in the News & Observer calls the tax increases unlikely. We are hopeful that General Assembly will not vote to increase taxes on cigarettes and beer.
So-called ‘sin taxes’ are regressive – falling disproportionately on lower-income workers – and are an unreliable and an ultimately diminishing source of revenue. Finding real solutions to below average teacher pay and our broken mental-health care system requires political leadership and the collective will of all North Carolinians – not just smokers, drinkers, and those who work in the tobacco and alcohol industries.