Local News

Senate Leader Pushes For Tax Increase On Cigarettes, Beer, Wine

Posted June 3, 2004

— At a time when the Legislature is struggling to cut spending, one of the most powerful men in state government is pitching the idea of so-called "sin taxes." Critics say the real sin is the tax itself.

Senate leader Marc Basnight is calling for a tax hike on beer, wine, and cigarettes that would generate hundreds of millions of dollars a year for North Carolina.

"I think the whole session should be about jobs, jobs, jobs and how we get there and utilizing this money would be beneficial," he said.

Basnight says increasing taxes on cigarettes, beer and wine is a way to generate extra revenue that would help offset the costs associated with alcohol abuse and tobacco addiction. He says it would not scare away big business.

"When a business comes here, they ask about corporate taxes, income taxes, property taxes -- anything that affects their bottom line. They don't ask 'What's your cigarette tax? What's your beer tax?'" he said.

"I'm not concerned about the impact on business for the same reason Mr. Basnight isn't. This is not a tax on manufacturing. This is a tax on low-income families, which are already victims," Rep. Sam Ellis said.

Ellis says taxing tobacco and alcohol indirectly targets financially-strapped families.

"About 40 percent of the people who use, let's say tobacco, are in the lower income bracket. So what we're doing is taxing people because they're the victim of an addiction. It doesn't make any sense at all," he said.

Most members of the House think this is a bad idea and have pretty much shot it down for this session.

Basnight believes the tax hike was never properly debated because many legislators signed a pledge saying they will not raise taxes.

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