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Cigarette Tax Increase Proposed To Lower Va. Car Tax

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A four-fold increase in the cigarette tax has been proposed in Virginia.
Matthias Weinberger: http://www.flickr.com/photos/51035610542@N01/60002388/
A four-fold increase in the cigarette tax has been proposed in Virginia.

A Democratic legislator is proposing to increase Virginia's cigarette tax by 400 percent. The bill, sponsored by Del. Patrick Hope, would increase the per-pack tax on cigarettes from 30 cents to $1.45. It would increase the excise tax on other tobacco products from 10 percent of the wholesale price to 50 percent. 

Hope says he would expect the tax to raise as much as $400 million a year, which could reduce the car tax by more than half. It would also have the added side effect of discouraging smoking in the commonwealth, particularly amongst young people, he says. 

"This is the only proposal that is being made in this session that will actually give money back to taxpayers," Hope says. "So, we need to do this. We need a shot in the arm for Virginia s economy. And I think working families are demanding it." 

The Arlington legislator is proposing that 92 percent of the revenue, or about $265 million per year, would be directed to city and county governments to provide relief for the personal property tax on private cars and pickup trucks. About $23 million per year from the tax would be used for smoking prevention and cessation programs.

Hope argues that the bill would bring Virginia's cigarette tax up to the level of the national average. Currently, the commonwealth's cigarette tax revenue is the lowest in the nation, he says.  

Last year, Hope proposed a similar bill that directed the additional cigarette tax revenue towards Medicaid programs. That bill was never passed out of committee.

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