Alaska Tax Update
Tobacco bonds/taxes
Jan. 19, 2006
To the editor:
I read your story about the use of tobacco bonds.
Do you mean to tell me that after suing the tobacco companies and making a deal that violates the commerce and compacts clauses of the Constitution that instead of using that money to cover the supposed high cost of healthcare of tobacco users that instead the state is going to use it for other purposes?
I find it offensive that not only have the people of Alaska made off with a ton of money unconstitutionally at the expense of the minority of tobacco users, but they continue to raise taxes on tobacco products in the name of health and at the same time are depending on tobacco users to smoke enough tobacco to fund their projects.
Could we at least have a sign placed on the building thanking and encouraging the thousands of current and future tobacco users in the state for providing the funding for the science building and future projects?
One other note, while the people of Alaska gave the government the authority to create taxes, nowhere in that constitution can I find that the state was given authority to create oppressive taxes for the purpose or guise of social engineering.
Bart Williams
Fairbanks
Also Read:? Bart Williams On Smoking
Cigarette smokers to pay $1 more
TESTIMONY: Supporters cite health benefits, but goal was to lessen property tax.
By ANNE AURAND
Anchorage Daily News
(Published: September 22, 2004)
Anchorage smokers will be making a hefty contribution to property tax relief starting Oct. 1.
Assembly members voted unanimously late Tuesday to increase the city’s tobacco tax by $1 to offset property tax reductions.
Prior to the vote, residents filled the Assembly chambers Tuesday to air their views on the tax, with fans outnumbering foes about two to one.
But those testifying weren’t talking about property tax relief. They talked more about how public health could be improved and deaths could be prevented if higher cigarette taxes trimmed the number of smokers.
Those opposed to the tax said it was an unfair burden on a single group and would hurt small businesses that sell tobacco.
The measure will increase the city’s 30-cents-a-pack tax on cigarettes to $1.30 per pack. Taxes on other tobacco products will jump from 15 percent of their wholesale price to 45 percent of their wholesale price.
Altogether, the city expects to earn about $8.9 million next year in new tobacco-tax income. That will offset property taxes, dollar for dollar, as a part of the mayor’s tax-relief plan. It will mean about $81 in yearly savings on a $200,000 home.
Assembly members Debbie Ossiander and Brian Whittle said it was important to diversify the city’s heavy reliance on property taxes and that this was a step in that direction.
But Assemblyman Dan Sullivan said the tax is a slippery slope, because other health concerns, such as obesity, could draw taxes on items containing fat or sugar.
Assembly members Dan Coffey and Janice Shamberg talked about how it is unfortunate that not a penny of the revenue will go toward helping smokers quit.
And Coffey added that it seemed like the city is saying to the 20 percent of residents who smoke, “Keep smoking because we need the revenue.”
Assemblywoman Anna Fairclough, who said she did not like “taxing a particular sin group,” also said she understood that smokers generate a cost that “the rest of us are picking up.”
Physicians as well as members of the American Lung Association, the American Cancer Society and the Alaska Native Health Board applauded a higher tax on cigarettes and said such taxes have been shown in studies to be the best way to reduce smoking, especially by deterring youth from starting.
They talked about the great cost smokers bring to the community. The Chamber of Commerce sent a representative to testify in favor of taxing tobacco for the benefit of the community.
There was no shortage of emotional testimony from those who have lost loved ones to cancer or survived cancer themselves. They said they wished someone had made it more difficult for them to start when they were young.
The tax is one part of a four-part tax-reform package that Mayor Mark Begich said would create breaks for most city homeowners and small-business people.
The tax plan includes exempting up to $20,000 in residential property value when calculating tax bills.
The benefits will only target homes occupied by owners. It also proposes a $20,000 exemption on business personal property, or the items located inside a business’s walls.
Begich also plans to raise taxes on owners of shops and businesses at publicly owned airports, the Alaska Railroad and the Port of Anchorage. He says those properties currently are under-assessed by about $85 million.
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