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    Philip Morris USA Fights Wisconsin Cigarette Tax Hike

    Representative cites New Jersey's tax increase, which caused a $22 million loss in revenue.

    MADISON, Wis. -- Philip Morris USA, the No. 1 cigarette manufacturer in the U.S., recently spoke out against Governor Jim Doyle's proposed 75-cent per pack increase in the state cigarette tax, WisconsinRadioNetwork.com reported.

    At the capital last week, Bill Phelps, a spokesman for Phillip Morris, argued the tax could hurt many small businesses, such as c-stores, across Wisconsin, as adult smokers to look at cheaper options for getting cigarettes, including online or at Native American casinos, the report stated.

    The proposed increase would bring Wisconsin's per pack tax rate from $1.77 to $2.52, and is estimated to add several hundred million dollars in new tax revenue to the coffers. Supporters of the increase said it would convince people to quit smoking, but Phelps said while it may work for some smokers, past evidence has shown most smokers will just look for cheaper places to buy cigarettes, according to the report.

    He added the estimated new revenue doesn't always become a reality, and pointed to New Jersey, which raised its tax to the current rate of $2.57 and lost $22 million in revenue after the increase, the report stated.

    Meanwhile, the second largest cigarette maker, R.J. Reynolds Tobacco Co., fought the state's proposal through its NoCigTax.com Web site. There, consumers and business owners can find Congressmen's phone numbers and e-mail addresses, along with data on the amount of cigarette tax revenue collected in the state during fiscal 2007.

    The site also offers a graph showing the breakdown of the profits in a pack of cigarettes based on the average price of a pack, at a little more than $4 in 2006. According to the chart, 48 percent of the price of a pack of cigarettes go to the government in the form of taxes and other payments, according to the site.

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