Barrett Kalellis
Monday, June 28, 2004

In Michigan, the man behind the tree is the smoker, who once again has to bear the brunt of the legislature’s craven response to solving its perennial budget shortfalls by raising taxes on tobacco products - 75 cents on a pack of cigarettes, 32 percent on cigars and pipe tobacco.

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  No matter that all serious studies concerning tobacco taxes conclude that gouging the smoking public is bad business — costing jobs, increasing criminal activity, unfairly targeting the less-well-off and ultimately decreasing the tax base as more people give up on smoking.

No, the only reason Governor Jennifer Granholm and her minions imposed these additional taxes is because they knew they could get away with it. Rather than face the harsh reality of having to cut unnecessary state spending, they self-servingly blather all the political correctness about how harmful smoking is and how they want to reduce health care costs.

Like so much other wasteful state spending, subsidizing health care costs is just another example of the creeping socialism that threatens to drown us all. Portions of these monies, for example, are advertised as going to fund smoking cessation programs.

Why would I want my hard-earned dollars to pay for simple-minded advice programs that interested parties can purchase on their own, if they feel the need? There is no dearth of available information on how to stop smoking. This can be found free on the Internet, or as part of individuals’ HMO coverage or in inexpensive paperback books on sale everywhere. Who decided that the state should be spending tax revenues on this?

Duplicitously peddled as just a “cigarette tax,” the new levies actually increase the price of all tobacco products, including cigars and pipe tobacco, which account for only 25 percent of all tobacco use. Why penalize such a marginal group, where revenue enhancement potential is relatively miniscule, and the products’ retail prices are already significantly high for the consumer?

As a matter of full disclosure, I have enjoyed cigars for 41 years. Regardless of whether this practice represents a significant health hazard or not, it is a choice that I have made. This freedom also entails that the state should not single me out for ad hoc taxation, along with others who have made the same choice, solely for the reasons that it cannot live within its budget and that smoking is no longer fashionable — implemented with a sanctimonious panache as a blow for public health.

In addition to the negative results of this legislation, there is a more serious, unintended consequence which fuels a disrespect for government in general. Targeted, punitive taxation and excessive government regulation will lead people to take matters into their own hands, to try to find ways around government obstacles.

Smokers like myself have quietly revolted over the years by taking anti-tax action in ways that are still available, some of which involve breaking the law. When tobacco taxes were increased during the 1990s, I stopped patronizing my local tobacconist for cigars and found out-of-state sources that would ship cigars by mail order. These were dollars that could have easily been spent in Michigan, but for the greed of legislators, they went elsewhere.

When shipping costs began to outweigh the Michigan tobacco tax about a year ago, I once again decided to purchase cigars locally. However, now that Lansing has seen fit to tax the wholesale price of cigars an additional 12 percent, I will once again seek my supplies elsewhere.

Other smokers will begin to seek these alternatives. Those close to Ohio or Indiana will buy across state lines. There will be a rise in the always-profitable cigarette smuggling business. Some have relatives in other states who will send timely, tobacco-laden “CARE” packages to their unfortunate kin in Michigan. There are also Internet options and tax-free Indian reservations that will help some smokers skirt the law.

Mary Welch, assistant manager of JR Tobacco in Southfield, is angry. “Every time they raise taxes on tobacco, it drives more customers away to places where they can avoid paying them,” she says.

“With a 32 percent tax on our products,” she fears, “this hits our industry especially hard. After 21 years in Michigan, we may be in danger of closing our store here.”

Welch thinks the targeted taxation is not only unfair to small retailers, but is also shortsighted. “They’re going to the well too often,” she adds, “and in their madness they simply don’t realize that they’re going to eliminate the base of their revenue.”

Smokers in Michigan are now spoiling to “fight than switch,” and since the customer is, as they say, always right, they will probably take their business elsewhere.

Barrett Kalellis is a Michigan-based columnist and writer whose articles appear regularly in various local and national print and online publications.