Earlier today, Americans for Tax Reform sent the Utah State Senate Business and Labor Committee a letter urging them to oppose the disastrous HB337, a bill that would slug consumers with a series of tax hikes that will hurt working families and small businesses, fail to raise the revenue its supporters promise, enrich criminal syndicates and harm rather than help public health.
At a time when Utahns are already dealing with higher costs across the board, H.B. 337 would not only raise the per-pack cigarette tax, it would also increase taxes on people trying to quit smoking through reduced risk alternatives, including those authorized by the Food and Drug Administration as appropriate for the protection of public health.
And it lands hardest on those least able to afford it. Cigarette taxes are among the most regressive taxes in existence. They fall disproportionately on lower-income and working-class Utahns. To make matters worse, this bill would also hammer small businesses, especially convenience stores, gas stations, and vape shops operating on thin margins. For retailers near Utah’s borders, the damage could be immediate. Idaho, Wyoming, Nevada, Arizona, and Colorado all have lower cigarette taxes. Dramatically widening that gap doesn’t eliminate demand, it simply pushes it across state lines or into illicit markets.
We’ve seen this before before. Large tobacco tax hikes routinely miss revenue projections – an analysis found only 3 of 32 earlier cigarette tax increases met revenue projection. The reason is obvious – legal sales fall, but smuggling rises and criminal syndicates are the only ones who profit.
Cigarette tax increased have also been proven to do nothing to reduce smoking rates. Evidence shows the only successful way to help smokers quit is through proven harm reduction policies. However rather than embrace science, this bill does the opposite and actively undermines public health by taxing the very products known to help smokers quit.’
Public health authorities, including the FDA, recognize that nicotine exists on a continuum of risk. Combustible cigarettes are the most dangerous because combustion creates the carcinogens that cause disease. Smoke-free alternatives eliminate that combustion and dramatically reduce exposure to those toxins. Taxing reduced-risk products as if they are the same as cigarettes will keep smokers smoking, with disastrous consequences.
Utah has long been a model of pro-growth, responsible fiscal policy. H.B. 337 moves in the opposite direction — toward higher taxes, greater complexity, and unstable revenue built on wishful thinking.
Utah families don’t need another tax hike. Small businesses don’t need another burden. And taxpayers deserve lawmakers who keep their word. H.B. 337 should be rejected.
You read the full letter below:
