Sin tax increases get mixed reviews from the taxpayers

Shannon McKenzie chewed a stick of gum — Extra Fruit Sensations flavor — while watching one of her children play on a merry-go-round toy at Everett Mall.

Although gum will soon cost more, McKenzie isn’t complaining. She accepts the way the Legislature decided to balance a $2.8 billion budget deficit. New taxes on candy, gum, soda pop, beer, bottled water and cigarettes are included in a $667 million tax package approved in Olympia this week.

Lawmakers also added a boost in the business-and-occupation tax rate for services, including those of hairdressers, accountants and lawyers.

“It’s not that big a deal,” McKenzie, 27, said Thursday. “It’s just a little bit out of everybody’s pocket.

The tax increases will take more out of some pockets than others. Beginning in June, buyers of gum, candy and bottled water will pay sales tax — in Everett, that’s 9.2 percent. Lawmakers added a new 2-cent tax to a 12-ounce can or bottle of soda pop, starting July 1. Beer drinkers, except for those buying microbrews, will pay an extra 28 cents per six-pack.

Unlike McKenzie, Maakeisha Mack, 20, thinks lawmakers should have taxed “something else,” not life’s little pleasures. “We’re in a recession,” the Everett woman said. Already, she said, vending machine snacks at her workplace have risen from 75 cents to a dollar.

Cigarette smokers will be hardest hit. The state tax on a pack of smokes will soon go up by $1, to $3. The increase alone will cost a pack-a-day smoker $30 per month. My first car payment was $240 a month, roughly what a pack-a-day smoker will spend once the higher tax kicks in May 1.

“It’s too much. We are very worried about the tax,” said Inok Youn, who owns the H&H Market and Deli on Everett’s Madison Street. The store she runs with her husband, D.J. Youn, has seen sales fall due to the recession. “The last year has been very slow,” she said.

At the store Thursday, Marlboros were selling for $6.69, while a pack of the Pall Mall brand was $5.79.

Travis Broyles was smoking a cigarette outside the Sunken Ship Tattoo and Piercing shop Thursday. The 21-year-old, who works at the shop, said the higher tax won’t likely force him to quit his habit. “I enjoy it,” Broyles said.

Nonsmoker Toran Jenkins, 43, has no problem with the state taxing cigarettes heavily. “Jack them up, it’s a sin tax,” the Everett man said. He isn’t happy about sales tax on candy. “With candy, that’s mostly children,” he said.

It’s true, these taxes raise fairness issues. They are regressive taxes, falling hardest on those earning the least. Yet except for higher taxes on services, they are entirely optional. We can opt out if we choose to see the tax plan as a push toward healthier living — with no candy, pop, beer or cigarettes. Fill a reusable water bottle and be on your way.

The trouble with that approach, if we give up our vices the state budget hole could go unfilled.

Dr. Gary Goldbaum, director of the Snohomish Health District, said there’s not much chance of us shedding all these habits. He is hopeful that the cigarette tax will significantly curb smoking, especially with kids.

“There’s a lot of research, both in economic literature and public health literature, that an increase in price will affect purchasing behavior,” Goldbaum said. Teenagers are most influenced by price, he said. Nicotine addicts may not quit, he said, but kids are much less likely to start.

“That’s why tobacco tax is a powerful public health intervention,” he said. “With the increase in the cost of a pack of cigarettes, the likelihood of teens buying them goes down dramatically.”

He doesn’t expect health benefits from candy and soda taxes because the increase is only a few cents. Goldbaum said research shows it would take at least a 20 percent increase in the cost of sugary drinks, which have been linked to childhood obesity, to really reduce consumption.

If all smokers did quit, even with the state counting on cigarette taxes, Goldbaum would be thrilled. The health care savings would be enormous, he said.

“From a public health standpoint, that would be a great problem to have,” Goldbaum said.

Julie Muhlstein: 425-339-3460, muhlstein@heraldnet.com.

Tax hikes coming

These tax increases are included in the budget package approved this week by the Legislature:

Beer: 28 cents per six-pack on mass-marketed beer, starting June 1 until June 2013 (microbrews excluded)

Soda: new 2-cent excise tax per 12-ounce bottle or can, starting July 1 until June 2013

Cigarettes: $1 per pack tax increase starting May 1, bringing total state tax to $3 per pack

Candy: adds sales tax starting June 1 (9.2 percent in Everett, sweets made with flour excluded)

Chewing gum: adds sales tax starting June 1 (9.2 percent in Everett)

Bottled water: adds sales tax starting June 1 (9.2 percent in Everett) until June 2013

Service businesses: a business-and-occupation tax surcharge, raising tax rate for hairdressers accountants and other service providers from 1.5 percent to 1.8 percent of gross receipts starting May 1 until June 2013

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