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Coalition Seeking 300% Tax Hike for Cigarettes

From Associated Press

A coalition of health organizations wants to increase the tax on a pack of cigarettes by 300% in California to boost funding for emergency care, nursing education, cancer research and other health programs.

The per-pack tax would jump by $2.60 under an initiative the coalition hopes to have on the November 2006 ballot, supporters said Tuesday. If voters approve the proposal, California’s total tax on a pack of cigarettes would rise to $3.47, the highest in the nation.

The initiative combines two competing measures.

One campaign, led by the California Hospital Assn., would have added a $1 tax. The other, spearheaded by the American Cancer Society, would have raised the tax $1.50 per pack.

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The new campaign includes those organizations, plus several others, including the American Lung Assn. of California, California Emergency Nurses Assn. and the American Heart Assn.

Revenue from the extra tax would be directed to various health programs, including cancer screening, prevention and research, low-cost children’s insurance, and tobacco education and cessation. Supporters also hope it would provide more money for emergency care and clinics.

Because the extra per-pack tax would be expected to curb sales, the initiative also allots $159 million a year to offset any loss of revenue for Proposition 10 programs. Proposition 10, approved by voters in 2004, added a tax of 50 cents per pack to fund early childhood education.

The increased revenue that the initiative’s supporters are touting will be short-lived, said Larry McCarthy, president of the California Taxpayers Assn., an anti-tax group.

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If people can’t afford to smoke, they will quit or buy illegal cigarettes, reducing the collection of taxes, he said.

“It’s very ill-advised. It will do nothing but damage to the tax structure and is not going to lead to higher levels of healthcare services,” McCarthy said.

The tax is projected to raise $2.7 billion annually if cigarette sales remain at the current level, but the higher price is expected to cut sales by about 8% a year, supporters said.


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