Myth: If Maine raises its cigarette tax, smokers will buy their cigarettes out of state.
Reality: Cross-border sales are not a factor in Maine. Tax stamp sales data for New Hampshire show very clearly that Maine tax increases DO NOT affect New Hampshire sales while Massachusetts tax increases DO affect New Hampshire sales. Canadian cigarettes are also not a factor, since prices there are very high.
Myth: If Maine raises its cigarette tax, smokers will turn to the Internet.
Reality: The most recent Adult Tobacco Survey shows that less than 2% of Maine smokers buy any cigarettes over the Internet. Although the future of Maine’s very effective law regulating delivery sales of tobacco products is uncertain, the efforts of credit card companies to discourage use of their cards for illegal Internet sales will help keep tax avoidance and sales to youth under control.
Myth: Raising Maine’s cigarette tax will encourage smuggling and support terrorism.
Reality: Factors associated with smuggling (cultural acceptance, very large cities, existing networks) are not present in Maine. A comparison of tax stamp sales with consumption data suggests that smuggling is not an issue here.
Myth: The cigarette tax is a “regressive” tax that is unfair to low-income smokers.
Reality: Low-income smokers are the group experiencing the greatest financial harm from tobacco use and are therefore the group most likely to benefit from quitting or cutting back. Smokers who quit or cut back substantially will actually save money, on both cigarettes and health care costs. Additionally, new revenue from tax increases can help fund programs such as MaineCare that directly benefit lower-income smokers.
Myth: Cigarette tax revenue is not a stable, predictable source of income.
Reality: Compared to revenue from taxes such as the corporate income tax, cigarette tax revenue is very stable and predictable. Corporate income tax revenue fluctuated quite dramatically between 1997 and 2004, from a low of $77.4 million to a high of $183.8 million. Cigarette tax revenues decline gradually and very predictably as fewer kids smoke and smokers smoke less or quit.
Myth: Raising the cigarette tax will hurt Maine’s economy and, in particular, retailers who sell cigarettes.
Reality: There is no evidence that customers who quit smoking or buy fewer cigarettes reduce the number of visits to retail establishments. In fact, smokers who quit or cut back have more money to spend on other consumer items. The factor most likely to reduce retailer business is the price of gasoline. The factor most hurting the economy is health care costs. When smokers quit or cut back, health care costs are reduced for employers, the State, and smokers themselves.
(Prepared by the Maine Coalition on Smoking or Health – April 2008)
76 % of Maine Residents Support Increasing the Tobacco Tax
Benefits of a $1.00 Tobacco Tax Increase