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1 Scott Drenkard, Should D.C. Have the Highest State Cigarette Tax in the Country 1 (2018)

handle is hein.taxfoundation/dchigartx0001 and id is 1 raw text is: 









  Should D.C. Have the Highest State Cigarette Tax in the

                                     Country?

                                     Scott Drenkard
                   Economist & Director of State Projects, Tax Foundation

        Testimony before the D.C. Council Committee on Finance and Revenue on B22-460
                                    February 1, 2018



Chairman Evans, Members of the Committee,

My  name  is Scott Drenkard, and I'm an economist and director of state projects at the Tax
Foundation. For those unfamiliar with the Tax Foundation, we are a nonpartisan, nonprofit
organization that has monitored fiscal policy at all levels of government since 1937. We have
produced the Facts & Figures handbook since 1941, we calculate the State Business Tax Climate
Index each year, and we have a wealth of data, rankings, and other information at our website,
www.TaxFoundation.ore.

I am also a Ward 6 resident and care deeply about the trajectory of our District. In 2014, my
colleagues and I played a citizen education role during the legislative process of D.C.'s beneficial
tax reform, which broadened tax bases, lowered tax rates, and improved tax fairness in the District.

I'm pleased to have the opportunity to speak today with regard to B-22-460, a bill to increase the
tax on cigarettes by $2.00 per pack, to a total excise tax rate of $4.50 for each pack sold. While
the Tax Foundation takes no position on legislation, I'd like to offer some of our findings from
research we have published on this issue in the last few years.

Cigarette   Taxes  Disproportionately Harm Low-Income Individuals

Cigarette taxes occupy a policy space at the intersection of fiscal and public health priorities.
Because these targeted tax increases are so multifaceted, they must be examined based not just
on their intentions, but on how they impact behavior and how they fit in with the overall tax mix
of a state.

In 2014, one of the priorities of the D.C. Council in enacting comprehensive tax reform was to
build a system that worked for everybody. That's why the final package (now law) balanced base
broadening, rate lowering, an expansion of the earned income tax credit, and business reforms
that helped all D.C. residents-businesses, individuals, families, and those struggling to get by-to
make the District a better place to live and work.


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