Michigan follows many other states in their effort to help their budgets

[candyman]

Does Michigan's High Cigarette Tax Encourage Bootlegging?

Cost-cutting smokers soon will pay a whole lot more to roll their own cigarettes.

And Gov. Jennifer Granholm wants to make them pay even more.

She has called for doubling the state tax on loose tobacco, cigars and snuff to help balance next year's state budget. That's on top of whopping increases in federal tobacco taxes -- including those for manufactured cigarettes -- that take effect April 1 to pay for expanding health insurance for low-income children, known as SCHIP.

The biggest federal tax increase hits roll-your-own tobacco, rising from $1.10 per pound to $24.78 per pound. Store-bought cigarette taxes are headed from 39 cents per pack to $1.01 per pack.

Granholm's budget wouldn't touch Michigan's $2-per-pack cigarette tax. But it would slam other tobacco smokers, chewers and puffers who've been a favorite tax target for states to balance budgets and, in the name of good health, discourage tobacco use.

If approved by the Legislature, state taxes on non-cigarette tobacco items would jump from 32% of wholesale price to 64% next year. Combined with the new federal tax, the average price of a one-pound bag of popular Gambler tobacco would skyrocket from $19 to $70 in Michigan.

A pound of tobacco can yield 2 1/2 cartons of homemade cigarettes, using inexpensive machines that stuff tobacco into premade paper tubes with filters. At $70, plus the cost of tubes, homemade would still be cheaper than $50-per-carton pre-rolled cigarettes, but would not be the bargain it is now.

"It's taking advantage of us. I don't mind paying a little extra if it helps the country. But I pay a lot of taxes," Russ Bonnici, 54, a customer at the Cigar & Cigarette Shop in Dearborn Heights, said last week. He had just bought a small bag of tobacco to make cigarettes.

"It's an incentive to cut back," said Bonnici, a railroad retiree. "It's just like gas: When prices go up, people use less."

Money to be had for state

Tobacco taxes are expected to generate about $1 billion for the state this fiscal year. Taxes on other tobacco products (OTP) -- other than cigarettes -- account for 4% of the total.

State officials predict that doubling the OTP tax will double revenues to $90 million. However, they admit they did not account for the higher federal tax, which could spur more smokers to quit.

Judy Stewart, lobbyist for the American Cancer Society, said raising taxes on cigarettes has proved to cut smoking, and that the tax on non-cigarette items should be raised equally to discourage their use.

"We're 100% behind that," Stewart said.

For tobacco retailers, OTP have become a large percentage of business, as smokers seek savings by rolling their own.

"Five years ago, I didn't even sell loose tobacco," said George Daiza of Martin & Snyder Product Sales, a Detroit wholesaler. Now, he said, roll-your-own tobacco accounts for about half of the OTP he sells to retailers.

Heating up lawbreakers

Daiza said a state tax increase will encourage a black market, just as Michigan's relatively high cigarette tax created a lucrative illegal market for cigarettes smuggled from states with lower cigarette taxes.

Pennsylvania has no OTP tax. Ohio's OTP tax is 17%, about one-quarter of what Granholm wants.

"You're going to see more people buying on the Internet, driving to Ohio and Indiana. They're going to drive to Pennsylvania and bring it back here," Daiza said. "Unless they put more people at the border to stop them, it's going to be crazy."

At the Cigar & Cigarette Shop in Dearborn Heights, owner Abraham Ghamlouche said he sells about $2,000 in loose tobacco each week. He said OTP accounts for up to 30% of his business, compared with 2% three years ago.

Ghamlouche knew of the federal tax increase, but was surprised to hear about Granholm's proposal.

"Wow, that's going to be tough," he said. Ghamlouche said perhaps one-fifth of his customers are out of work, and said the cost increases will push some to seek tobacco illegally.

"It's hard to quit, but with the economy, they're going to keep smoking," he said. "I'm going to lose half the customers. Right now, they pay with pennies, nickels and dimes."

Except for licensed wholesalers and a few smaller licensees, it's a crime to bring cigarettes or tobacco into Michigan without paying the Michigan tobacco tax. Wholesalers who buy cigarettes are required to affix a state tax stamp on every pack of cigarettes sold to retailers.

But there is no tax stamp required for bags of loose tobacco and other OTP, so it's harder for investigators to find illegal stashes.

Smuggling already common

Last year, the Free Press easily found Michiganders who drive to Indiana or Ohio to buy cigarettes, mostly for small amounts. State Police said large-volume smuggling, especially to metro Detroit, is extensive and they don't have the staff to stop it.

A carton of cigarettes is at least $10 cheaper in Indiana because of the tax difference.

If Michigan doubles its OTP tax, combined with the higher federal tax, a one-pound package of tobacco would be about $17 cheaper in Ohio than in Michigan, not including sales tax. In Pennsylvania, that bag would cost $23 less than in Michigan.

The Michigan OTP tax is applied to the wholesale price plus the federal tax, which will climb to $24.78 per pound on April 1. Michigan's 6% sales tax then includes state and federal tobacco taxes.

The Michigan State Police assigns four officers to enforce tobacco taxes. State Police spokeswoman Melody Kindraka said it is speculative whether higher taxes will spur more tobacco smuggling.

Tobacco wholesaler Wisam Paulus complained that the higher taxes will hurt legitimate sellers. He said doubling Michigan's tax will convince tobacco users to find illicit tobacco.

"Upwards of 60% of my retailers do not buy their other tobacco products from me," said Paulus, co-owner of Trepco Imports and Distribution Ltd. in Madison Heights. "If you double the OTP tax, it will shut down my OTP department. I have no doubt about that."

For the full article, see Chris Christoff, "Granholm wants tax to snuff tobacco habit, help budget", Detroit Free Press, February 23, 2009.

THIS IS BULLSHIT! Wisconsin raised tax by 78 cents and there in another proposed bill that would make the minimum price $7.50 a pack. Minnesota has jumped from $4.56 to $6.12 recently. Ohio currently has the lowest prices that hover around $4.35 a pack. Bootlegging has already started in many states and is working out very well, I just bought a caron out of some guys trunk for $23 and he even made a profit off of that.

Sadly, the highest tax on beer in the 50 states is only $1.01...and there is still no inventory tax on any alcohol either.

Why are all of these taxes on cigarettes and other tobacco products going up so high and so many time while alcohol stays low?

[Rev.Reverence]

FUCK!~~

ASS!

[candyman]

FUCK!~~

ASS!

Don't worry man, if the shit hits the fan I know where to get them. My friend and his "buddies" are currently selling individual cartons out of their trucks, but if it gets worse they are going to start pushing cases and I will be selling for him...

Oh, any ATF agents reading this can ignore it because I am just kidding...bitches...nah, you can't catch me anyways...

[jynxxxedangel]

:rant: !!!!!!!!!!!!!!!!!!!!!!!!

[Scary Guy]

I bet she's a non smoker. I'm a non smoker too but at least I can sympathize with the smoker's plight.

People do want to quit because of this. Either that or they were selling the materials they got from the government help line to help pay for cigarettes.

Well at least they haven't banned them outright.... yet.

Also, I want my fucking transfats.

[candyman]

I bet she's a non smoker. I'm a non smoker too but at least I can sympathize with the smoker's plight.

People do want to quit because of this. Either that or they were selling the materials they got from the government help line to help pay for cigarettes.

Well at least they haven't banned them outright.... yet.

Also, I want my fucking transfats.

Mmmm...transfats...

They will probably never ban them completely because they are going to see how much money they can squeeze out of us and then they will hold it there...

[TitsMcGee]

how much do they really expect to make from the taxes if people quit smoking because they can't afford it anymore?

[candyman]

how much do they really expect to make from the taxes if people quit smoking because they can't afford it anymore?

That is my question. They already had plenty from it years ago. Its been a long time since they did anything with alcohol, the most recent major case was prohibition! If they raise taxes on alcohol, just a little, and at least tried to enforce some of the regulations they would make a shit ton more off taxes then this crap with cigarettes.

[Rev.Reverence]

That is my question. They already had plenty from it years ago. Its been a long time since they did anything with alcohol, the most recent major case was prohibition! If they raise taxes on alcohol, just a little, and at least tried to enforce some of the regulations they would make a shit ton more off taxes then this crap with cigarettes.

Good point!

[Slogo]

The problem is the taxes always go on tobacco.

What they should go on are narcotics.

But wait...those aren't legal

If they were they could be taxed

Hmmmmm.....

Disclaimer: All I do is drink

For information, visit Law Enforcement Against Prohibition

[Der Nister]

The federal government has a hypocritical stance on tobacco. Even since it passed a 1998 federal law forcing cigarette manufacturers to pay billions for treating tobacco-related illnesses, it continues to subsidize tobacco growers to produce the crop responsible for millions of deaths and billions of dollars worth of health problems.

And they (the government) say they are raising taxes on tobacco to make people stop smoking but the reality of it is they are helping farmers grow tobacco that they know peole will buy.

What kind of mind set thinks that this info and knowledge is gonna get past the average American?

Do they hope we are so dumb that we won't look into it? i guess so since all of us attended public schools so it must be true.

This is the road to prohibition and we will have more problems then they forseen.

[candyman]

And they (the government) say they are raising taxes on tobacco to make people stop smoking but the reality of it is they are helping farmers grow tobacco that they know peole will buy.

What kind of mind set thinks that this info and knowledge is gonna get past the average American?

Do they hope we are so dumb that we won't look into it? i guess so since all of us attended public schools so it must be true.

This is the road to prohibition and we will have more problems then they forseen.

They do shelter people quite a bit. The sad part is that the information that IS given to people is often trumped up and put in place with other, irrelevant shit to make it seem better. Like when they say: "For the children" and "Right to Clean Air"

There is no such thing as clean air, and if there was what right do we have to it anyways? It's not our bar or restaurant. Honetly, the shit that people preach to me is awful, right out of the can fresh from the government. The say FACT every two minutes because apparently saying the word is truth.

It will be looked into soon, seeing as Wisconsin, now with 85% of those in power being democrat, is just going to pass a bill for a statewide ban without a vote. Which is great because it was voted down three times by the people of the state already. But the Wisconsin Tavern League, which represents the PEOPLE, is on the case ready to make a stand.

Just wait until the bans kill a little more business, no more night life, pack venues because they are the only ones open, and then they will go after something else.

[candyman]

Sorry this bill is for Wisconsin but it still fits...

Below is the analysis from the budget bill regarding TLW issues. I am still

scouring the document to see what else is included and will keep you posted.

Of course, the biggest hit we took was the Governor including the statewide

smoking ban in his budget. Some highlights…

• Includes every work place, including private clubs

• Is effective 60 days from the signing of the budget

• Exceptions for private residences, a limited number of hotel rooms and

certain residence rooms in assisted living facilities.

• Adds a general prohibition against smoking outside within less than a

reasonable distance from any entrance to a building, a window that may be opened,

or a ventilation opening that draws air inside.

• The bill also specifically prohibits smoking in sports arenas and bus

shelters.

• Municipalities can pass laws furthering the smoking ban. This is a floor,

not a ceiling.

• Owners and managers are to be the enforcers of the ban, including

asking a person who is smoking to leave and refusing to serve the person

if the place is a restaurant, tavern, or private club.

• Any person who violates the smoking ban shall be subject to a forfeiture

as follows:

1. Not less than $25 nor more than $50 for the first violation.

2. Not less than $50 nor more than $100 for the 2nd violation.

3. Not less than $100 nor more than $250 for the 3rd or any subsequent

violation.

• Any business found violating the law shall be subject to the following

forfeitures:

1. $50 - $100 for first violation

2. $100 - $200 for second violation

3. $200 - $500 for third and subsequent violations

The Governor proposed to raise the cigarette tax again. It would add 75 cents

in state taxes to a pack of cigarettes, making the state tax $2.52. With the new

passage of a federal cigarette tax of 62 cents, the total taxes included in a pack

of cigarettes bought in Wisconsin would be $3.53 if this budget passes.

Primary enforcement for seatbelts was also included in the budget. This bill

authorizes a law enforcement officer to stop or inspect a vehicle solely to

determine compliance with seat belt use requirements, subject to any

constitutional requirement that the officer have probable cause to believe that a

violation has occurred. The bill also increases from $10 to $25 the penalty for

violating this state’s laws requiring the use of seat belts.

[Tacohitts]

All I know is that mole on the face c#nt wants to enact a Per capita tax(a tax on your own body) about 15-25 dollars a year.

wonder what would happen to anyone if they called her a c#nt to her face.also that bitch wants to have back the food tax as well.

its government trash like this that you wish they would have died in an traffic accident,just them and no one else.

[Simon Bar Sinister]

I remember reading some numbers from the (I believe) GAO back in '05-'06 about how Social Security could be stabilized by ending all anti-smoking education programs. Seems enough of you smokers would die off soon enough that everybody else would be covered.

I don't smoke, and I don't give 2 shits if you do - I'm just putting that out there.

[candyman]

I remember reading some numbers from the (I believe) GAO back in '05-'06 about how Social Security could be stabilized by ending all anti-smoking education programs. Seems enough of you smokers would die off soon enough that everybody else would be covered.

I don't smoke, and I don't give 2 shits if you do - I'm just putting that out there.

Well, there was a recend conference in Europe because they used money the recieve from taxing cigarettes to fund child care programs. They also talked about how taxes on smokers should be raised because they put a "burden" on health care. Long story short, the real doctors got to talk and said that alcohol, with a slight raise in taxes, would bring more money to those causes. They also said that with smoking, the burden on the health care systems is questionable at best, no real proof that cigarettes actually caused any of this. However, with all of their data on alcohol related problems it seems that alcohol puts a much greater burden on the health care system.

Honestly, I don't bash people that drink, and they shouldn't bash people that smoke, both are natural products that have chemical tweeks and and have varying effects. However, if people think that the effects of smoking were downplayed in the past, then what are we doing with the effects of alcohol? Hell, they are doing far more than just downplaying the effects, they are promoting the living shit out of alcohol! I really makes me sick...

Honeslty, these things aren't killing me fast enough...but I am too poor to afford anything nice so this is my installment plan with suicide...

[Simon Bar Sinister]

Remember, the brewers/distillers of this land were the driving force behind criminalizing marijuana.

[candyman]

Remember, the brewers/distillers of this land were the driving force behind criminalizing marijuana.

Yeah, its a conspiracy that I hate...I do love my single malt scotch and the occasional canadian whiskey...but still. People have stop talking about "drinking healthy" because I am willing to bet that less then 5% of the worlds population has the mental capacity to comprehend that. Most of their brain cells have already died off and they have to remain "cool"...

Maybe someone will take alcohol down to their knees...but now that they are putting that shit into energy drinks I fear it is too late...

[jynxxxedangel]

Honeslty, these things aren't killing me fast enough...but I am too poor to afford anything nice so this is my installment plan with suicide...

SNAP!!

[Scales]

I was planning on taking up smoking tobacco again, miniature cigars because they're generally cheaper, less harmful, and less addictive than cigarettes.. as well as a feasible way to make me feel more calm as opposed to morbid depression. Now this ridiculous tax and ban is going on, which won't stop me but definitely pisses me off.

All drugs could be regulated and taxed reasonably but instead-- The death-tolls from the violence of the black-market continue on. Cops and politicians become clowns. Cops make less arrests of killers and rapists because they're too busy with drug offenders. Biased drug information goes into kids heads for someone's profit. Non-violent drug-offenders overload the prisons. Drugs are unable to be kept out of the prisons. People with "mood disorders" who've had luck with marijuana can't obtain it legally. And people die for not having access to experimental drugs that aren't FDA approved. This country is so steeped in pride I wonder if there's any hope for it.

[TitsMcGee]

I was planning on taking up smoking tobacco again, miniature cigars because they're generally cheaper, less harmful, and less addictive than cigarettes.. as well as a feasible way to make me feel more calm as opposed to morbid depression. Now this ridiculous tax and ban is going on, which won't stop me but definitely pisses me off.

All drugs could be regulated and taxed reasonably but instead-- The death-tolls from the violence of the black-market continue on. Cops and politicians become clowns. Cops make less arrests of killers and rapists because they're too busy with drug offenders. Biased drug information goes into kids heads for someone's profit. Non-violent drug-offenders overload the prisons. Drugs are unable to be kept out of the prisons. People with "mood disorders" who've had luck with marijuana can't obtain it legally. And people die for not having access to experimental drugs that aren't FDA approved. This country is so steeped in pride I wonder if there's any hope for it.

+1

[Rev.Reverence]