From: The Civic Federation
The Civic Federation joined with the Federal Reserve Bank of Chicago on April 2, 2015 to co-host a conference on the use, efficacy and future of sin taxes. Experts, practitioners and academics from around the country gathered to discuss the theories surrounding governments’ use of sin taxes as well as national trends and issues specific to tobacco,
marijuana and gaming revenue. Attendees to the conference included civic and business leaders and government officials. To download participants’ presentations, click here.
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Session I – Competition and Cooperation: Cross-Jurisdictional Issues and Tobacco Taxes
The first panel discussed challenges, opportunities and the future of tobacco taxes in Illinois, as well as the role taxes play in governments’ goals to reduce tobacco use among residents. Civic Federation Board member Adrienne Archia moderated a lively discussion of enforcement and budgeting issues and the wider philosophical questions associated with tobacco taxation.
Dr. Jidong Huang, Senior Research Scientist at the University of Illinois at Chicago Institute for Health Research and Policy, explored some of the economic arguments for and against tobacco taxation and presented research results from around the world that reinforce efficacy of tobacco taxes. Dr. Huang emphasized the strong evidence from hundreds of studies that tobacco taxes improve public health, with tax increases especially correlated with reduced consumption and increased cessation among current smokers and reduced take-up rates among non-smokers. Brian Cooper, Acting Program Administrator at the Illinois Department of Revenue, discussed cigarette taxes from the enforcement perspective, describing the State of Illinois’ efforts to prevent trafficking and catch traffickers. He said that the large difference in tax rates between Illinois and some surrounding states, such as Missouri and Kentucky, makes cigarette trafficking very lucrative while the risks associated with smuggling are much less than for illicit drugs. Enforcement is therefore very important to preserve State revenues and discourage smuggling. Ivan Samstein, Chief Financial Officer of Cook County, described the relative importance of tobacco and other sin taxes within the County’s budget. He explained how the County is coping with the continuation of a long-term decline in tobacco use and therefore reduced tax revenues when it has an increased need for tobacco tax enforcement. He said that the County’s strategy to reduce youth smoking rates with its tobacco tax is working, and the County is adjusting its overall long-term fiscal structure to compensate for lost revenues and other fiscal stresses.
