Friday, May 25, 2007

Judy, Judy, Judy..........What is the Answer?

On 5/10/07 I sent an email to my State Rep, Judy Morrison. When I didn't get a reply by 5/18/07 I sent a follow up. Well, as of this morning still nothing. But then I should have realized that very few elected officials, at any level of government like to talk about raising taxes.. The email is published below and it refers to the 79¢ per pack Kansas state excise tax on cigarettes. Which previously had been 25¢ It does not include the 39¢ per pack federal excise tax, nor does it include info on local sales taxes.

So go ahead, as the goose that lays the golden egg keeps getting thinner, what will be taxed at higher levels to make up the difference in the loss of excise tax monies? Beer? Wine? Hard liquor? Property? Vehicles and other personal property? Income? What about items that do not have individually assessed taxes? Maybe they need to be added to the household supplies, clothing, electronics?

Then of course local governing bodies will need to look at raising sales taxes to make up for lost income. That is a separate calculation. Oh, and please do not confuse this with the 'Master Settlement Agreement" as that is something entirely different.

The email to Ms Morrison is below:


We chatted about this a couple of years back and you had indicated to me that when Kansas raised the excise tax that there was not a mass exodus of smokers to buy cigarettes elsewhere.
Well, I think the figures supplied by KDOR would contradict that. There has been a tremendous reduction in actual cigarette sales (and for the local municipalities the corresponding sales tax)
Here are KDOR's figures, income from the excise tax, with a tremendous increase in 2003 based on the increased excise tax

Fiscal Amount Percent
Year Collected Change
2000 $49,124,538 -4.0%
2001 $48,784,401 -0.7%
2002 $48,040,207 -1.5%
2003 $129,249,741 169.0%
2004 $119,789,045 -7.3%
2005 $118,979,280 -0.7%

Now when those dollars are divided by the excise tax rate, one gets the number of packs actually sold

2000 196,498,152 packs
2001 195,137,604 packs
2002 192,160,828 packs
2003 163,607,267 packs
2004 151,631,702 packs
2005 150,606,683 packs

Now, I'll ask the question that I asked back then....................what will be taxed next to make up the difference?

The above represents a reduction of 46 million packs of cigarettes. At 79¢ per pack state excise tax and 39¢ per pack federal that's a bunch of money to make up. And at approximately $3.50/pack retail at approximately 7.5% sales tax that is also another bunch of money.