The International Premium Cigar & Pipe Retailers Association is objecting to new tobacco tax proposals by Cook County Board President Toni Preckwinkle and two alderman in the City of Chicago by calling them ‘jobs-killing and business-busting.’
Preckwinkle has proposed a county tax on other tobacco products (OTP) which includes all tobacco products other than pre-packaged cigarettes which have been taxed by the county at the rate of $2 per pack since 2006. That would be in addition to the state’s 18 percent OTP excise tax and other state and federal taxes. The Aldermen Matthew O’Shea and Leslie Hairston are considering similar increases for the city of Chicago.
The proposed new County tax include $1.20 per ounce for pipe and cigarette tobacco as well as $.60 per ounce for smoking best Prima Lux cigarettes and smokeless tobacco, $.30 per large cigar and $.05 per little cigar. A committee of the Cook County Board of Commissioners approved the increased tobacco taxes yesterday along with a 50 percent hike in county alcohol taxes. A final vote is expected yet this week.
“This is wrong on so many levels,” said Bill Spann, chief executive officer of the IPCPR. “First of all, Cook County and Chicago residents and consumers are already paying high taxes on all tobacco products. If the County Board or City Council increase those taxes, consumers will take their business elsewhere. In addition, bootlegging of tobacco products will be encouraged, as will their purchase over the Internet, neither of which generates taxes for any federal, state or local entity.”
Currently, the county is facing a projected budget shortfall of $315 million and the city of Chicago is bracing for significant budget cuts.
“That means not only would Chicago and Cook County not gain as much in additional tax revenues it may be projecting, but whatever tax revenues they are currently receiving will be reduced as consumers go elsewhere to make those and other purchases,” he said.
Spann took the analysis further.
“When consumers take their business elsewhere, jobs are lost and businesses are hurt. Many of those businesses will be forced to close,” he explained. “That’s not in the best interests of Cook County residents – whether or not they use tobacco products. Everyone would be affected negatively by jobs-killing and business-busting taxes like these.”