Maryland Considers Cigarette Tax Hike

Maryland smokers already pay the eleventh highest cigarette taxes in the country, at $2 per pack; however, if lobbyists like Vincent DeMarco have their way, those taxes will increase by another dollar in 2013, vaulting Maryland to the sixth highest taxed state. Although Maryland raised its cigarette tax by $1 in 2008, DeMarco argued that additional increases would encourage smokers to quit, bring additional revenue to the state and save the state millions in tobacco-related healthcare costs.
"The good thing about tobacco increases is they achieve both goals," DeMarco told The Washington Times, estimating the proposed increase would bring in an additional $100 million in annual revenue. "It's really a win-win for the state, but we're doing this because it's a public health measure."
Opponents to such an increase have expressed concern that raising taxes wouldn't encourage smokers to quit, but to travel across state lines to purchase cigarettes from states like Virginia, which boasts the second lowest taxes in the nation at 30 cents per pack.
"For across-border purchases, [an increase] just makes it more attractive," State Senator David R. Brinkley (R) told the newspaper.
The Maryland comptroller's office has also come out against the increase because of smuggling, stating that Maryland needs to increase smuggling penalties before it raises the cigarette tax again. Currently, transporting contraband cigarettes into Maryland is a felony with a maximum of a $50-per-carton fine and up to two years in prison; possessing contraband cigarettes is a misdemeanor with a $1,000 fine and up to a year in prison time.
"Raising the taxes on cigarettes without tightening the enforcement on smuggling is going to lead to more problems," Kim Frum, spokesperson for Comptroller Peter V.R. Franchot (D), told the paper. "These are very lucrative smuggling operations."
DeMarco acknowledged that large-scale smuggling operations are a problem; however, he said that he believes the average consumer is not driving cross state lines for cheaper cigarettes and that the smuggling angle has been exaggerated.
"People aren't going to spend $4 in gas to save $1 on the cigarette tax [in another state]," he said. "There will be a little bit of that, but ultimately you're going to have fewer people smoking."