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The Daily Tar Heel

Tax our sins: A prudent way to increase the state's revenue would be to increase the excise taxes

The N.C. General Assembly should consider raising state excise taxes on cigarettes and alcohol in order to close the gap on current and future budget shortfalls.

N. C. Senate Majority Leader Marc Basnight suggested raising the state's ""sin taxes"" Thursday" a week after Gov. Bev Perdue mandated a 7 percent budget cut for all state government agencies.

With the state facing a projected $2 billion shortfall for the current fiscal year there is only so much budget trimming that can realistically be carried out. The government desperately needs revenue and taxpayers are strapped. In this malaise economy excise taxes are an innovative way to increase government revenue.

For instance the state's cigarette tax stands at 35 cents per pack and ranks sixth lowest nationally. According to the N.C. Alliance for Health increasing North Carolina's cigarette tax to $1.35 per pack a rate equal to that of Pennsylvania would generate an additional $386.6 million in tax revenues per year.

Such an increase in government revenues would put a huge dent in the budget gap and prevent the state from cutting funding to vital programs like education and mental health services.

Opponents of the excise tax including N.C. Senate Republican Leader Phil Berger argue that taking more money out of the private economy would only worsen economic conditions.

When the state is facing the possibility of cutting education funds the last thing on anyone's mind should be whether or not individuals are able afford feeding their nicotine addictions.

In addition to alleviating painful spending cuts and preventing job losses raising taxes on cigarettes and alcohol could also help reduce the billions of dollars in annual health care costs attributed to the use of such products.

With the state expecting an even deeper gap in the next fiscal year a period that will most likely not be eased by federal stimulus money the need for more tax revenues will only increase. The state government cannot be trimmed down to its bones.

If the state wants to prevent further budget shortfalls and avoid cutting funds to valuable programs" it must consider increasing its ""sin taxes"".


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