• Massachusetts
• NTU Rates Congress
• In Your State
• State Issues

On behalf of the National Taxpayers Union’s (NTU’s) 7,100 members in Massachusetts, I urge you to reject Governor Patrick’s proposal to increase the state’s tobacco tax by $0.50 per pack to $3.01. While proponents claim tobacco tax hikes are a “win” for Bay State taxpayers, the reality is that these punitive schemes rarely, if ever, produce the promised revenue and are burdensome to small businesses and lower-income households.

Despite fanciful claims to the contrary, many tobacco tax hikes across the country have failed to produce the promised revenue. In 2009, Washington, D.C. raised its cigarette tax from $2.00 to $2.50 per pack. The District projected the new tax would generate $45 million in revenue, about 20 percent above 2009 levels. Instead, revenues came in $12 million below projections and $4.2 million lower than before the tax was imposed. Similarly, New Jersey reported a $52 million shortfall in tobacco tax revenues after it raised its cigarette tax by 17.5 cents in 2007. Due to these declining revenues, states often turn to broad-based tax increases to pay for an overspending problem. A recent NTU study also showed that 41 of 59 state tobacco tax increases from 2001-2006 were followed by more expansive tax increases within two years, as states attempted to make up for tobacco revenue that never appeared.

Over one-quarter of smokers in Massachusetts earn less than $15,000 a year and a punitive tax hike like this threatens to hit them hardest. Raising tobacco taxes by $0.50 per pack would place the state’s burden higher than neighboring New Hampshire, Vermont, and even nearby Maine. The practical result of such a tax increase would be a large incentive for cross-border shopping, and plenty of cheaper options would be available. For example, a pack-a-day smoker living in the Merrimack Valley could drive a few miles, shop in New Hampshire, and save over $900 a year.   

Massachusetts already heaps higher state and local taxes on its residents than all but 10 states nationwide. Rather than adding to those burdens by increasing a regressive tax, the General Court can and should pursue ways to trim wasteful spending and protect taxpayers. Doing so will avoid additional harm to Massachusetts’ businesses as well as consumers, many of whom have modest means. We look forward to working with you to enact common-sense reforms that do not include damaging tax hikes.

Sincerely,