Republican tax cuts for Big Tobacco is money that could have gone to schools and safety

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The new tax law would slash premium cigar taxes from $3.50 to just 50 cents. Cigarette smokers didn't fair as well, but they did get a freeze on their taxes, among the highest in the Midwest.

The Republican tax bill passed by the Legislature included a curious lifeline in this day and age: a tax break for smokers. 

Or more accurately, a yuge tax break for smokers. To be exact: $300 million over the next decade.

The cuts include lowering premium cigar taxes from $3.50 to 50 cents, and freezing cigarette excise taxes at $3 a pack.

Republicans say these cuts are long overdue because Minnesota’s tobacco taxes are far higher than those of surrounding states, which drives consumers to cross borders or buy online. Anti-smoking advocates like ClearWay Minnesota and the state health department credit those cost-prohibitive taxes with decreasing smoking among 11th graders by one-third since 2013.

On the economic side, Health Commissioner Ed Ehlinger warned in an op-ed Monday that the breaks would not only be a bonanza for tobacco companies, but a drain on Minnesota’s general funds.

For fiscal year 2016, two excise taxes plus the sales tax on cigarettes added up to $655 million, an important chunk of revenue. 

State law requires that every year, $22.25 million is awarded to the University of Minnesota’s Academic Health Center. An additional $4 million is earmarked for the health department’s medical education and research program, which provides financial support for some 3,000 doctors-in-training yearly to offset the state’s health workforce shortages.

These expenditures are guaranteed regardless of how much the state brings in from taxes. Which means that the cuts will be passed on to the state’s general fund, which feeds Minnesota’s K-12 education, transportation, human services, public safety, veterans, and more.

“It is reprehensible that Minnesota Republicans have prioritized more than $300 million in tax breaks to big tobacco in the next decade, over the fiscal integrity of the state and the best interests of Minnesotans,” Governor Mark Dayton said Friday.

Republicans have responded that since the governor already caved to these tax breaks and others, he needs to get over it.

 


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