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slides: Massachusetts Cigarette Tax Top 10 In US–Ranking

Thursday, June 13, 2013

 

Massachusetts residents are paying one of the highest excise tax rates on cigarettes, according to a tax comparison analysis by independent research group the Tax Foundation. At $2.51 dollars per 20-pack of cigarettes, the state has the 9th highest excise tax rate in the nation.

But there is a method to this madness, says Mass Budget President Noah Berger. “The Tax Foundation data shows that our tobacco tax is above average, which represents a state policy to reduce smoking rates–particularly among young people–by increasing the cost of tobacco products."

While the cigarette excise tax rate is one of the highest in the country, several other excise tax rates are fairly low. The state also collects a smaller share of its total taxes using excise taxes than do most other states. But, Berger concedes, there is a down-side to the state's otherwise below average tax rates. "It is important to remember that if tax rates overall are too low it reduces a state’s capacity to make investments in education, infrastructure, safe communities, and other building blocks of a strong economy.”

For a run-down of how MA tax rates on common goods compare with other New England states, look below.

Stuart Loosemore, Director of Government Affairs and Public Policy at the Worcester Regional Chamber of Commerce, describes taxes as a tricky and delicate balance from a business perspective. "Taxes go toward providing services needed by individuals and by businesses. But there is a tipping point that makes it impossible for businesses to do business, to be productive, and to keep their doors open," he said.

So where's the balance? Some ask if this is overly harsh on businesses as opposed to residences. "It's all about where the tax falls and who's footing the bill. Small businesses are feeling the crunch when additional revenues are needed," said Loosemore. The bottom line, he says, is that money is needed to run the government. So the essential question is: what services and benefits do taxpayers get out of it? He believes that if people can't see the benefit from what they're paying for, it's even harder to pay taxes because they don't feel that they're getting anything out of the money that's being taken from them.

The Tax Foundation's analysis, "Facts & Figures 2013: How Does Your State Compare?", can be found here.

 

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