DCBigPappa's Blog

Politics & Pop Culture from a homocon.

Money. . . Up in Smoke

It seems that the tax revenue expected from the recent cigarette tax increase here in DC never materialized.

As part of gap-closing measures for the current fiscal year, the city increased the excise tax for cigarettes from $2.00 to $2.50 per pack!  The 50 cent increase in the cigarette tax was, among other things, projected to increase revenue.

Our illustrious city council failed to consider the effect that would be had by raising the District’s cigarette tax rate 25% higher than neighboring Maryland and an astounding 733% higher than is levied across the river in the Commonwealth of Virginia.

Not only do new estimates show the tax hike will bring in $15 million less than was originally projected, cigarette tax revenue is expected to actually be $7.6 million less than pre-hike levels.  All of this is according to a letter from DC’s Chief Financial Officer, Natwar Gandhi to Mayor Adrian Fenty.

Meanwhile, our friends over at the Campaign for Tobacco Free Kids claim that a dollar per pack increase in cigarette excise taxes would raise an additional $6.8 million in revenue.  Silly rabbit!


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