Texas Rolling in Cigarette Tax Money, Mounting Surplus Should Ignite Tax Relief - Texas Scorecard

The Houston Chronicle reports that the state will collect $244 million more in cigarette tax revenues under the $1 per pack increase than predicted.  While smoking is most assuredly a bad habit, more money for big government is also an addiction that must be broken.

Anti-smoking groups had made rosy predictions that the tax would discourage smoking that haven’t panned out.  It is well documented that this tax disproportionately impacts lower income groups, as they are more likely to smoke.

Once again, combined with the recent announcement that sales tax revenues have jumped more than 9 percent, this demonstrates that there will be an enormous surplus by the time the 2009 Legislature convenes.  Rep. Ken Paxton has also projected that the new business tax will raise at least $50 million more than projected.

While it is unlikely that the tobacco tax increase will be reined in (as 20 percent of the population, smokers are an increasingly unpopular and easily targeted group), this windfall should be used to reduce other taxes.