Tax analysis flawed

In his editorial on the proposed tobacco tax increase, Tim Lee’s analysis is flawed regarding some of the proposal’s components. The essence of Mr. Lee’s argument is that the tobacco tax proposal would create new spending programs, mandated by the Constitution, and that these programs could not be funded by the increased tobacco taxes. Mr. Lee’s contention that all Missourians would be subject to a major tax increase to fund these programs is unfounded.

Here are the facts: The proposal would allocate roughly $102 million for partial restoration of Medicaid health services (or comparable health services) for any individual whose income is less than 200 percent of the federal poverty level. It also would allocate roughly $102 to improve physician reimbursement rates for those treating Medicaid patients.
That said, the proposal is quite clear that these activities are to be funded only to the extent that the new tobacco tax revenues become available. Only those who choose to buy tobacco products would be subject to any additional tax.

It is unfortunate that Mr. Lee’s attempts to criticize the tobacco tax proposal obscure the fact that Missouri badly needs a meaningful anti-smoking program and additional dollars to ensure access to health care for low-income Missourians.

It is wise public policy for Missouri to implement an adequately funded anti-smoking program and to foster enhanced health care access for our low-income residents. The tobacco tax proposal would be a major benefit for all Missourians, without resulting in any other unrelated increased costs to taxpayers. If Mr. Lee truly has the best interests of Missouri in mind, he should speak out in favor of a proposal that both improves the health of our citizens and generates the revenue to achieve this important goal.

— Tom Kruckemeyer
Director of fiscal policy and chief economist for the Missoui Budget Project.