This article is the last in our weeklong series outlining the coming tax changes.
Georgia lawmakers are considering a plan that would nearly double the state's tax on cigarettes. Smokers and store owners are concerned, but health advocates are pushing for more.
As part of its efforts to overhaul Georgia's antiquated tax code, the Special Council on Tax Reform and Fairness for Georgians recommended an increase in cigarette taxes from 37 cents to 68 cents per pack.
The move would raise the state's cigarette tax from the lowest in the Southeast to among the highest and pull in an estimated $114 million in tax revenue.
"Business will definitely go down," said Ahmed Tharani, manager of the Shell convenience store on West Ridge Road. "We're already struggling with the economy, and we don't have any support."
But anti-smoking groups don't think the 31 cents goes far enough. They'd prefer to bump up the prices by $1, which would generate more than $350 million for the state.
"About 98 percent of smokers start between 13-18, and one way to deter our kids from even picking up the habit is to increase the price of the product," said Eric Bailey, Georgia's advocacy manager for the American Cancer Society. "For Georgia's tax to be so low is unacceptable, especially if we are really serious about trying to reduce smoking rates and reduce health care costs."
The state's cigarette tax has remained at 37 cents since 2003, when state lawmakers voted to raise it from 12 cents.
"When the economy started to go down, people started buying cheaper cigarettes," said Raj Kumar, a Shell cashier who stocks cigarettes. "As prices go up, people no longer buy the premium cigarettes. They're buying the cheapest ones they can get."
The 11-member tax reform council spent months considering the cigarette tax and other issues, choosing not to include taxes on alcohol or sweets just yet.
"A lot of times you hear the monicker of the sin tax, and this is not a moral judgement on consumption," said Roger Tutterow, an economics professor at Mercer University and tax council member. "This change would move the cigarette tax in parity with the average rate for surrounding states. There are a variety of public policy arguments, but at the end of the day, our recommendation is based on parity."
Opponents to the proposal say stores near state lines could lose business, but health groups also point to the convenience factor.
"There seems to be fatigue with smokers going to stores across state lines where they can save some change," Bailey said. "Especially with gas prices going up now, smokers aren't going to pass by a convenience store and inconvenience themselves to save some money but pay more in gas. It doesn't make sense."
The U.S. Centers for Disease Control and Prevention estimates that smoking causes about $7.18 in health care costs per cigarette pack sold in the United States. Smoking cost the country about $96 billion in 2009, according to CDC statistics.
In Georgia, this could mean about $2.5 billion annually and $537 million in Medicaid costs.
"We're coming to the point where tobacco is costing us more than the revenue it generates," Bailey said. "We don't see it as a tax. We see it as a user fee. If you don't consume the product, you don't have to pay for it."