Wednesday, January 21, 2009

Another Way to Pay for a Trauma System

by Brett Hooton, contributor

Another legislative session, another minority targeted for a tax increase. Last session the target in the tax crosshairs of Governor Beebe was the natural gas industry, including some Arkansas landowners who receive royalty payments. This group was simply too small to have any impact when they stood up for themselves, though I was happy to be standing with them. Now the administration is at it again. This time the target is cigarette smokers. Since cigarette smokers are a sufficient minority it should be easy to railroad them into swallowing a tax that the rest of our population doesn’t want to pay. I should point out at this point that I am not a smoker. I am assuming that a trauma system is needed and will in fact cost $30 million.

There are two problems that I have with the proposed cigarette tax.
1. Why are we paying for a trauma system with a cigarette tax?
2. Why are we imposing a $100 million tax, upon any group, during a recession? This simply takes $100 million of disposable income out of the economy.

The only proposed solution for funding the trauma system, mentioned by the media and top state officials, has been the cigarette tax. Why were cigarette smokers singled out to be taxed? While smoking does cause considerable health issues, it seems quite unlikely that it causes much trauma. The administration has targeted a minority, increasing their taxes to almost double the current rate. It is more reasonable to pay for a trauma system with funds from those who cause trauma, such as fees paid by drunk and reckless drivers, and those committing assault and other violent crimes.

Representative Ed Garner (R- Maumelle) has drafted a bill which will do just that. It is similar to a bill, introduced by a democrat, which passed the House 95 – 0 before being held up in the Senate. This bill has been adapted to satisfy the Senate’s previous objections. This is a common sense bill. If you commit a violent crime, as part of your penalty you pay a fine. That fine is increased and a part of that fine will go to help pay for the state trauma system. If you commit a serious driving violation, including drunk driving, you too will help pay for the trauma system. Some trauma is also caused simply by accident, so a portion of the funding is slated to come from the current tax on insurance premiums (the insurance tax revenue currently goes into the general revenue fund). If the trauma system is as high a priority as the administration states and with the expected $300 million surplus, it should not be difficult to allocate $11.4 million of that to the trauma system. Doesn’t it just make sense that those who are causing the most trauma in the state be the ones who pay for it? If I wanted to fill up Jason’s blog space I’d go on to discuss the problems with increasing our healthcare program with a flat revenue source (cigarette tax), but I don’t think he’ll give me that much space.

The administration continually talks about economic development, and to be fair I think they’ve done a fairly good job. However, now is definitely not the time to tax Arkansans to the tune of $100 million a year. This is probably the worst tax proposal in terms of economic impact. A tax on cigarettes has a direct impact on Arkansans’ disposable income. I don’t know of a smoker who decides they are going to cut back on cigarette smoking so they can rent a movie, go to a ball game, or buy other retail items. This $100 million would come out of money spent on other services and goods. Can we afford to cut consumer spending by about $100 million in our current economic environment? This tax needlessly overtaxes Arkansans by pulling $100 million out of our economy for a $30 million trauma system.

There are many arguments which I simply cannot fit within my word limit. I’m looking forward to continuing this debate in the future.

1 comment:

Chris said...

I say tax smokeless tobacco. First- its disgusting and causes cancer. Second- its disgusting and doing nothing for the image of Arkansas if almost every male over the age of 12 has that stupid ring in their pack pocket. I've seen lawyers whip out a can in court. I dare say there are more dippers than smokers in this state. Lets go after them.

Plus, I'm an alcoholic and don't want to be taxed under the alternative plan.