One way or another, there may well be another tobacco tax increase among nearly $800 million worth of across-the-board tax increases in North Carolina. That’s what is proposed for the fiscal year beginning July 1 unless an irate electorate makes itself heard to the state’s legislators, according to the International Premium Cigar & Pipe Retailers Association.
Proposed tax increases include raising the state sales tax to seven percent, hiking income tax rates for high wage earners, new liquor tax increases and a tobacco tax increase to $.50 per pack of cigarettes and 13 percent on other tobacco products, including premium cigars and pipe tobacco. If Governor Beverly Perdue has her way, there would be even higher taxes on other tobacco products of up to 28 percent and an increase of $1 per pack in the cigarette tax.
"Times are tough all over. Revenues down? Cut spending. That’s what families do. And that’s what governments should do. That’s why now is the time to tell your state senators and representatives that you are against any newtaxes because they will only hurt our chances of economic recovery," said Chris McCalla, legislative director of the IPCPR.
The IPCPR represents more than 2,000 retailers and manufacturers of premium cigars. McCalla explained that these retailers and manufacturers represent, for the most part, small family businesses and not what is usually referred to as ‘big tobacco.’ There are nearly three dozen IPCPR members in North Carolina who employ hundreds of people whose jobs would be at stake if, as anticipated, an additional tobacco tax increase would lead to a decrease in sales, according to McCalla.
"If you use tobacco in any form or derive any of your income from tobacco in any way, you will likely be negatively affected by the proposed new taxes, making it all the more difficult to participate in any economic recovery," said McCalla.
A House-Senate conference committee meets this week to create a compromise version of the state budget that currently includes the tax increases to help cover what the Democratic leadership claimed to be a $4.6 billion shortfall.
"The budget has become a political football which we are not interested in playing with. And neither, we believe, are the voters in this state. All we want is an effective government that doesn’t automatically reach for the tax increase button when revenues fall short," McCalla said.