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Pans legislation to increase crime and taxes
dennis Wyatt web

State Senator Richard Pan, D-Sacramento, rolled out legislation in August to increase crime in California and jack up taxes on the state's poor.

Of course, Pan isn't billing his legislation as such. Instead he says it is a plan to increase cigarette taxes by $2 a pack as well as slap the tax on e-cigarettes. Pan wants the $1.5 billion raised to fund state health programs, tobacco-related medical research and antismoking programs. Pan also is calling for a boost in enforcement directed at bootleg cigarette sales.

Pan is a doctor by profession and a politician by trade. As a physician he recognizes smoking as being a root cause of a number of costly ailments. As a politician he has an addiction to taxes necessary to achieve his goals. That's a deadly 1-2 combination for taxpayers, any citizen that savors the rapidly disappearing notion of self will, and anyone that loathes the concept of the majority self-righteously ganging up on a minority justified by the self-serving conviction they know what is best for everyone else.

To be clear, I have never smoked. There are few things I disdain more than smoking as well as second-hand smoke. One of those things happen to be the majority using government to exert its will on the minority as well as punish them financially and otherwise when it comes to behavior that is personal in nature.

Of course, Pan can proclaim he has the majority of Californians on his side since a Field Poll this week indicated two thirds of Californians would support an increase in cigarette taxes. Eating fast food can lead to serious health problems over time as well, And too much caffeine has ill health effects. How many of those Californians willing to tax smokers (that research shows tend to be less educated, poorer, and younger) who also frequent McDonald's and Starbucks would also be supportive of a $2 tax on Big Macs and a $2 tax on a Starbucks latte?

What is perceived as an unhealthy habit or vice for one California may not be perceived that way by another. And just because a majority of Californians agree the government should tax an unhealthy habit with the clear intent of trying to get people to stop engaging in it doesn't make it morally right to do so.

Currently a pack of smokes goes for an average of $6.45 in California. That includes a federal excise tax of $1.01 and a state cigarette tax of 87 cents. Pan's $2 sin tax would bring cigarettes up to $8.45 a pack.

Cigarette taxes are 44 cents a pack in North Dakota. Currently there is only a 47-cent a pack difference with California. If Pan gets his way the difference will jump to almost $2.50.

It would certainty entice bootleggers to load up vans and go west to mine the California Mother Lode that Pan will create.

A pack of Marlboro 100 cigarettes could be bought wholesale in North Dakota for $3.40 without paying taxes. That's a $5 difference between what the same cigarettes would cost in California if Pan succeeds in increasing the per pack tax by $2. If bootleggers sold cigarette packs at $6 - $2.45 less than what the new retail plus tax price would be - they would pocket $2.60 cents a pack. Assuming 10 cents of each pack covers travel costs and such. That would leave a bootlegger with a profit of $25 a cartoon while a cigarette buyer would save $24 a cartoon. It doesn't take a genius to see what is going to happen.

The price of cigarettes could easily spawn the New York City phenomenon of selling "loosies" or individual cigarettes in urban areas like Los Angeles, San Francisco, and Oakland.

This, of course, would enrage folks who said the main reason they backed Pan's plan was to improve the health of others and not simply to raise taxes because the state would be losing lots of revenue on the non-taxed "loosies."

Politicians could demand a crackdown on bootlegging and the stage is set for the next Eric Garner to die.

Garner didn't die of smoking. He died indirectly because of New York City and New York State creating a lucrative market for bootlegging cigarettes. New York taxes cigarettes $4.35 a pack while New York City slaps on another $1.60 a pack tax on top of the federal tax of $1.01. It is why cigarettes cost $14 a pack in New York.

Garner had been arrested numerous times for selling "loosies" on that city's sidewalks at $1 a cigarette to clear $6 from a single pack. On his last arrest he resisted and ended up getting in a chokehold that went wrong and died in police custody all because New York politicians that said their purpose in jacking up the tax was to save lives and not about the revenue per se.

It should be noted "loosies" are bought by individuals that can't afford the cost of a $14 pack of cigarettes.

"Loosies" could be sold in California, if Pan succeeds, for 75 cents. With 20 cigarettes in a pack, an individual could buy a pack of 20 cigarettes at a 7-Eleven and sell them individually to clear $6.50 for every pack.

Perhaps Pan's legislation should instead be called the "Making Entrepreneurs out of Poor People Tax Act."

This column is the opinion of Dennis Wyatt and does not necessarily represent the opinion of Morris Newspaper Corp. of CA.