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Prop 56 Tobacco Tax

    • 2564 posts
    1
    September 18, 2016 3:48:48 PM PDT

    https://ballotpedia.org/California_Proposition_56,_Tobacco_Tax_Increase_(2016)

    • 2564 posts
    2
    September 18, 2016 3:50:39 PM PDT
    How is the current tax allocated?

    California levies an excise tax on tobacco products. As of 2016, the tobacco tax is 87 cents per pack of cigarettes. Revenue from the tax is distributed as follows:[2]

    10 cents goes to the General Fund. About $84 million was raised for the fund in fiscal year 2015-2016 due to this allocation.
    25 cents goes towards tobacco prevention, healthcare services for low-income persons, and environmental protection. Proposition 99 of 1988 created this portion of the tax. About $259 million was raised for these services in fiscal year 2015-2016.
    2 cents goes towards breast cancer screenings and research. For fiscal year 2015-2016, $20 million was raised for these services.
    50 cents goes towards early childhood development programs. Proposition 10 of 1998 created this portion of the tax. About $447 million was raised for these programs in fiscal year 2015-2016.

    The federal government also levies a tobacco tax at $1.01 per pack of cigarettes.

    How would Proposition 56 change this?

    Proposition 56 does not change how the 87 cent tobacco tax is allocated. Rather, the measure would add an additional $2.00 tax, bringing the total tobacco tax up the $2.87 per pack of cigarettes. It would increase the excise tax on other tobacco products equivalently. Proposition 56 would change the definition of "other tobacco products" in state law to include e-cigarettes. Therefore, Proposition 99 and Proposition 10 taxes would apply to e-cigarettes.[2]

    How would new revenue be distributed?

    Revenue from the $2.00 tax levied by Proposition 56 would be distributed through a four-step process:[2]
    Step 1: use new revenue to replace old revenue lost due to lower tobacco consumption resulting from tobacco tax increase.
    Step 2: use next five percent of revenue to pay the costs of administering the tax.
    Step 3: allocate $48 million to enforcing tobacco laws, $40 million to physician training to increase the number of primary care and emergency physicians in the state, $30 million towards preventing and treating dental diseases, and $400 thousand to the California State Auditor to audit funds from the new tax.
    Step 4: allocate 82 percent of remaining funds towards services related to Medi-Cal, 11 percent of remaining funds towards tobacco-use prevention, 5 percent of remaining funds towards research into cancer, heart and lung diseases, and other tobacco-related diseases, and 2 percent of remaining funds towards school programs focusing on tobacco-use prevention and reduction.
    • 2564 posts
    3
    September 18, 2016 3:58:05 PM PDT
    On the flip side is this from the tobacco companies:
    http://www.noonproposition56.com/just-13/


    We all want to help those who want to stop smoking, but

    Prop 56 is not what it appears to be.





    Prop 56 is a $1.4 billion “tax hike grab” by insurance companies and other wealthy special interests to dramatically increase their profits by shortchanging schools and ignoring other pressing problems.

    Made up your mind yet?
    • 2564 posts
    4
    September 20, 2016 1:42:52 PM PDT
    http://www.sacbee.com/news/politics-government/capitol-alert/article97238827.html
    • 4977 posts
    5
    September 20, 2016 3:59:50 PM PDT
    What's funny is the California Teachers Assoc. has supported the Democratic candidates almost exclusively. Now the Democrats have a majority in our State Legislature and a Democratic Governor and they don't like what's coming out of Sacramento.
    Time to flush out the incumbents.

    The lottery was supposed to fix all this back in the 80's too.
    • 2564 posts
    6
    September 26, 2016 4:44:29 PM PDT
    CDC has clarified their position. CDC does not estimate the cost of smoking per pack.



    Using information available by a web search for estimates of cigarette sales and nealth costs of tobacco.



    Cigarette sales 2013. Federal Trade Commission Report




    https://www.ftc.gov/system/files/documents/reports/federal-trade-commission-cigarette-report-2013/2013cigaretterpt.pdf




    Using the Federal Trade Commission estimate of about 12.8 billion packs (256 billion cigarettes).




    http://www.cdc.gov/tobacco/data_statistics/fact_sheets/economics/econ_facts/index.htm




    dividing the CDC estimate of $170 billion for the direct medical costs of smoking.by the 12.8 billion packs of cigarettes:




    $13.30 per pack. Cutting that number in half for my conservative estimate of about $6 health cost per pack of cigarettes.



    Increasing the price of tobacco products is the single most effective way to reduce consumption



    http://www.surgeongeneral.gov/library/reports/preventing-youth-tobacco-use/exec-summary.pdf



    I have not been able to obtain a health cost estimate of tobacco from either state or county health officials.



    It seems to me that tobacco companies have greater political leverage than health officials. Or the public.




    People who would benefit, to me, are voting against their own best interest. Why? Possibly because of the way media carries the message.
    • 2564 posts
    7
    September 26, 2016 4:49:49 PM PDT
    More numbers. $170 billion divided up among the 312 million residents of the United States?
    $545 per person. What would you do with $545 if it weren't being spend on the health costs of tobacco?
    • 2564 posts
    8
    September 27, 2016 10:10:07 PM PDT
    More numbers:
    Per capita lifetime expenditure is $316,600, a third higher for females ($361,200) than males ($268,700). Two-fifths of this difference owes to women's longer life expectancy. Nearly one-third of lifetime expenditures is incurred during middle age, and nearly half during the senior years. For survivors to age 85, more than one-third of their lifetime expenditures will accrue in their remaining years.

    https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/
    In ball park numbers, that is about $4,420 per person per year. What are your health costs per year?
    Is cigarette health cost of about $545 per year per person in the ball park? If so, cigarettes represent about one-eighth of the United States health cost.
    What are your numbers? Where should we spend our prevention dollars?
    • 2564 posts
    9
    September 28, 2016 6:07:24 PM PDT
    http://www.mercurynews.com/2016/09/28/editorial-ignore-outrageous-prop-56-tobacco-tax-ads/


    Opinion





    Editorial: Ignore outrageous Prop 56 tobacco tax ads




    
    
    
    





    FILE - This Thursday, Sept. 17, 2015 file photo shows an ashtray with cigarette butts outside the Oklahoma County Courthouse in Oklahoma City. Researchers found that smokers who switched to special low-nicotine ones wound up smoking less and were more likely to try to quit, according to a new study published in the New England Journal of Medicine on Wednesday, Sept. 30, 2015. (AP Photo/Sue Ogrocki)
    California spends $9 billion a year on tobacco-related care, and taxpayers pay about one-third of it. (Sue Ogrocki, Associated Press)


    By Mercury News Editorial Board

    PUBLISHED: September 28, 2016 at 1:58 pm | UPDATED: September 28, 2016 at 4:15 pm



    Nobody blows smoke in the face of voters better than the tobacco industry.

    These are the folks who market deadly products to kids in order to turn a buck. They’re at it again with a supremely sleazy advertising campaign designed to kill Proposition 56, which would raise the cigarette tax in California by $2 a pack to $2.87 a pack, which would be more than the national average of $1.63 a pack, but far less than New York’s $4.35 a pack.

    The ads are insidious. They tug at parents’ heartstrings, claiming the proposition takes money away from schools — a flat-out lie — and gives it to greedy insurance companies. In fact it goes to pay doctors to treat poor people who are newly-insured under Covered California.

    Without adequate pay, doctors can’t afford to treat large numbers of these patients who need preventive care, which saves huge amounts of public money, or treatment of serious illnesses, many causde by smoking or secondary smoke.

    Remember, smoking kills 40,000 Californians every year. It’s the state’s No. 1 cause of preventable death. Prop. 56 will save thousands of lives, substantially reduce the state’s health care costs and increase its atrociously low reimbursement rates for doctors who treat poor patients.

    But the tobacco industry’s despicable campaign is working. Bankrolled mainly by R.J. Reynolds and Philip Morris, the No on Prop. 56 campaign has spent more than $50 million to blanket the airwaves with scurrilous ads.

    Support for the tobacco tax — initially strong — dropped to 53 percent in a recent Field poll.

    The most craven ad stars Long Beach high school math teacher Davina Keiser. She says she is “astounded” to learn that not one penny of the measure goes to improving California schools. She calls it “bad math.”

    If this is the kind of analytical skill our kids are learning in math class, no wonder they’re behind the curve.




    Prop. 56 does not take a single dollar from schools. The independent Legislative Analyst’s Office says it will raise $20 million a year for public schools to enhance their smoking cessation programs.

    The tobacco industry hangs its claim on the fact that Prop. 56 revenue will not be counted toward Prop. 98, the 1988 ballot measure that guaranteed a set percentage of state revenue for schools. But many propositions have had the same exemption so that all their revenue can go to the specific cause voters are deciding on. A recent measure for mental health care is one example.

    Tom Torlakson, the state superintendent of schools, supports Prop. 56. So does the California PTA . They know smoking harms children, and kids who come to school sick fall behind. Newly-insured low-income families need doctors to care for them, and that’s what Prop. 56 is for.

    The ads also claim too little funding from the tax will go to anti-smoking programs. (Oh, the irony.) But Prop. 56 triples funding for the state’s anti-smoking program.

    Taxpayers now spend $3 billion a year on tobacco-related medical care, much of it for smokers. Regular preventive care could help them quit or at least take other steps to control chronic diseases brought on by the habit.

    Increasing tobacco taxes has proven again and again to be the most effective way to reduce smoking. This is why so many states have been far more progressive than California on this.

    Don’t let the tobacco industry that kills so many Americans kill Prop 56. Think for yourself. Vote yes on this life-saving measure.
    • 2564 posts
    10
    February 23, 2017 11:48:46 AM PST
    https://www.nytimes.com/2017/02/22/us/alcohol-tobacco-firearms-cigarettes-millions-secret-bank-account.html?emc=edit_th_20170223&nl=todaysheadlines&nlid=66809837&_r=0



    The article describes a situation where people give in to temptation and don't get caught.




    Going native, temptation, who watches the watchers?


    California recently passed Prop 56. Prop 56 increased the tax on a pack of cigarettes by $2. The expected tax revenues beginning in April 2017 is $1.4 billion per year. Decreasing as the sale of tobacco decreases.

    Money collected by this tax is fenced. The money can only be used fro the purposes spelled out in the proposition. California's Board of Equalization gets a fixed amount for policing tobacco tax collection. Enough money, in my opinion to have ten enforcers in each of the 58 counties. Even so, the Executive is trying to renege (my opinion) on funding BOE. Even so, using a single agency, BOE, to collect and enforce creates temptations.

    The Legislative Analysts Office opens the door to cheating by using the term "tax avoidance" instead of "tax evasion".

    The health community, doctors, epidemiologist, are complicit, in my opinion, by not disclosing the health cost of a pack of cigarettes. The health community does not seem to use an economic health model. A model used to make financial decisions.

    In simple terms. Why encourage an unhealthy activity? The encouragement is the silence.




    The major health advance I see from Prop 56 is that fewer people will buy fewer cigarettes. Fewer cigarettes relates to less tobacco related illness. As well as less tax revenue, What is the benefit to society of less tobacco consumption? Is it less money spent on tobacco caused illness? If so, how does society benefit?

    As tobacco tax revenues dwindle, what are the benefits to society of healthier people? Will the spending of tobacco tax on health uncover the need for a different source of dedicated funding for health improvement?

    Enforcers will be tempted to go native. Enforcers can make a quick buck by finding loopholes. Casinos? Across the border trade? Changing labels, counterfeit tax stamps? Plus the thoughts brewing in the minds of those who are trying to make a quick buck.
    • 2564 posts
    11
    February 23, 2017 1:58:10 PM PST
    http://www.who.int/tobacco/mpower/en/
    World Health Organization comments on preventing non communicable disease.
    • 195 posts
    12
    February 25, 2017 5:19:36 PM PST
    As tobacco tax revenues dwindle marijuana tax revenues will be implemented and replace the lost tobacco tax revenues. Plans were being made for the use of a tax on these cash crops, here in the County, last year. This way there will not be a Federal Tax on marijuana, it is after all, still illegal at the Federal level.

    The heck with tobacco tax revenue now. The new cash cow, at the State and Local levels is going to be the bumper crops and cultivation of marijuana. There is your loophole. Very sad but true.
    • 2564 posts
    13
    February 26, 2017 1:58:10 PM PST
    ptdonoho said:
    As tobacco tax revenues dwindle marijuana tax revenues will be implemented and replace the lost tobacco tax revenues. Plans were being made for the use of a tax on these cash crops, here in the County, last year. This way there will not be a Federal Tax on marijuana, it is after all, still illegal at the Federal level. The heck with tobacco tax revenue now. The new cash cow, at the State and Local levels is going to be the bumper crops and cultivation of marijuana. There is your loophole. Very sad but true.

    Thanks, pddonoho. I have not seen an effort to "fence" the tax on MJ. That suggests that "government" is expecting an early Christmas. Money for pet projects - OK.

    Money for police, health care, mental health care? When pigs fly.

    • 2564 posts
    14
    June 8, 2017 7:32:47 AM PDT
    Cross posted.
    Cough up. Prop 56 was a step in the right direction. Did it go far enough? I've seen reports that claim "health taxes" should be 75% of the sales price of the most expensive brand. Three times the sale price, before taxes, of the most expensive cigarettes would be collected across the board on all cigarettes. The health benefit is that people stop smoking. People don't start smoking. Opposition? Howard Jarvis Tax Association? State of Jefferson? If the taxes collect are dedicated to cancer research and to prevention of a black market is a bonus
    • 2564 posts
    15
    June 15, 2017 3:41:01 PM PDT
    http://calbudgetcenter.org/blog/governor-legislative-leaders-agree-split-difference-proposition-56-tobacco-tax-revenues-medi-cal/



    Assembly Bill 120

    http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180AB120



    and Senate Bill 105

    http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB105



    My reason for writing this e-mail is to pre-empt political comments from what I call the anti-government faction.



    In my opinion, the wording of Prop 56 and subsequent legislation is to use information from the medical community, as modified by political decisions on funding of health care and insurance coverage of health care.



    My opinion is that the medical cost of a pack of cigarettes is in the $7 per pack range. Only New York state seems to be discussing taxes on tobacco to cover medical costs associated with tobacco.
    • 2564 posts
    16
    June 15, 2017 10:09:02 PM PDT
    American Cancer Society circa 2013, Health cost $5 per pack.

    https://www.cancer.org/research/infographics-gallery/tobacco-related-healthcare-costs.html



    Wallet Hub

    https://wallethub.com/edu/the-financial-cost-of-smoking-by-state/9520/

    California ranks 42nd. $36,534 per year per smoker. The health care costs are reported as $2,200 per year per smoker.



    This works out to a cost of about $50 per pack per year to the smoker. The methodology used attributes most of the cost to opportunity cost. What could have been purchased had the smoker not smoked, The Health costs are identified as $3,884 per smoker per year. About $5 per pack per smoker per year.



    Should smokers pre pay the health costs? Should a pack of cigarettes include the health care burden? If so, should the health care payment be dedicated to spending on health?

    .
    • 2564 posts
    17
    June 15, 2017 10:13:02 PM PDT
    DickBoyd said:
    American Cancer Society circa 2013, Health cost $5 per pack. https://www.cancer.org/research/infographics-gallery/tobacco-related-healthcare-costs.html Wallet Hub https://wallethub.com/edu/the-financial-cost-of-smoking-by-state/9520/ California ranks 42nd. $36,534 per year per smoker. The health care costs are reported as $2,200 per year per smoker.
    Edit correction. The health care cost per year per smoker is $3,884, not $2,200.
    This works out to a cost of about $50 per pack per year to the smoker. The methodology used attributes most of the cost to opportunity cost. What could have been purchased had the smoker not smoked, The Health costs are identified as $3,884 per smoker per year. About $5 per pack per smoker per year. Should smokers pre pay the health costs? Should a pack of cigarettes include the health care burden? If so, should the health care payment be dedicated to spending on health? .