Tuesday, October 2, 2018

South Dakota's Initiated Measure 25 Wants A Few Of Us To Pay For Something That Benefits All Of Us. 'Tain't Fair.

     There's something obnoxious about singling out a group of people and taxing them to
Not Fair
support a civic function that benefits all of us. 
Initiated Measure 25 on South Dakota's ballot next month wants to do just that by jacking up the tax on tobacco products to the cumulative tune of $35 million, according to estimates by both Republicans and Democrats, whose respective parties have each come out against this measure at their conventions last Summer.
     I can see where supporters are coming from.  Republican Speaker of the South Dakota House Mark Mickelson, who proposed the initiative, last June told the Sioux Falls Argus Leader that many South Dakotans in search of technical educations are migrating out of state to better educational opportunities elsewhere:  "You talk to anyone in Yankton or out in western South Dakota and those folks end up going to Norfolk, Nebraska, or Gillette, Wyoming.  We can't compete.  Workforce development is a critical issue and I think we have a responsibility to act."  Indeed we do, and the aims of IM 25 are worthy and straightforward, with the dual approach of lowering tuition and providing money for the schools.  As an employer in this state, I'm acutely aware of our labor shortage and the need for developing a workforce from within.  Losing young people to better educational opportunities elsewhere is something that needs to be addressed, and pronto.
     Im-25 just doesn't happen to be the right way to do it.  South Dakota has been imposing a tobacco excise tax above the standard sales taxes since 1923, a system that now dings tobacco users in all 50 states.  I haven't researched the philosophical bases for these taxes, but they have been in place for so long that they're now an embedded part of state budgets here and probably in every other state.  I suppose there were so many smokers way back when that squeezing a few cents a pack out of them and putting the money into the general revenue fund seemed like a fair way to tax a broad pool of residents for widespread government operations.  As recently as 1965, 43% of Americans were smokersNow that number is 17%.  Back then the burden was distributed much more broadly. Now it targets fewer than 1 in 5 of us.  It isn't right to squeeze that small minority for money to support a program that benefits everybody in the state, either directly by providing good technical educations or indirectly by the improvement that a good labor force brings to the economy. We need to unify and address workforce development, not hand the burden to a small minority of our residents.
     This initiative is for the birds.  IM-25 needs to be rejected.


  1. Would expanding the 'reach' of the corporate income tax constitute a proper response?

  2. From another location, Adam Mclean writes: Sadly, I am currently a cigarette smoker, but (FAR LESS ‘sadly’) I FULLY support IM 25.

    Unlike this post would suggest, IM 25 would NOT ‘take from a handful of smokers;’ - instead it taxes almost every level of tobacco distribution.

    If our state was open to an income tax, I would not be so much ‘for’ sin taxes as a means to increasing our state tax revenue.

    I just realize that my state has a radical understanding of taxes (in general) and in order to build enough revenue to allow for a sufficient state government (in the face of an isolationist-puritanical population) what else can anyone do but support (in order to eventually exacerbate) ‘sin’ taxes?

    And even at the most superficial face value: opposing the idea of ‘taking from a few in order to provide what is due to the many’ is morally and economically wrong. It’s anti-Biblical, anti-Christ, and anti-Economics when it’s clear (to some) how more customers with more money, lead to business owners making MORE money. So, I beg to differ with this post while I very much love this blog.

    To have a fair income tax is to have a ‘progressive’ income tax, and to have one of those is to take from the wealthiest few in order to —>PROPERLY<— distribute A FRACTION of that wealth to the lesser well-off -and the whole- which includes the business class.

    Our progressive tax system is part of being American. Taxes are mostly democratically chosen, and are often really GOOD for Americans!

  3. Wow Adam Mclean. I was a smoker for 51 years and quit ten years ago, about the time the state put the buck on to pay for education. But just like the tobacco settlement money, the tax on vide lottery and other taxes passed to help education, the money always seems to end up in the general fund and then can be used for EB-5, Gear up and other means of "promoting" business and leaving plenty of room for malfeasance.

    As far as progressive taxes being American, while everyone was watching the Kavanaugh mess, the House passed another 3.1 trillion dollar tax cut. The only thing about the American tax system that is progressive is the passing of our debt on to the next 7 generations.

    I voted no on all but W.

  4. So Dak needs an income tax! For Pete's sake, all taxes come from income, right?
    Those who make the most 'benefit' (money) from our state owe it back to the state (not all of 'it') but a larger portion than the young couple with 2 kids that struggles daily to keep it going on a substandard wage. Those with the most 'it' (money)- wouldn't it make you feel better just seeing 'it' working in our state benefitting others?

  5. As a non smoker since 1971, I normally don't take a position on these issues. But, the harm caused by tobacco use far outweighs any other concerns and I can't find a good reason to oppose any measures that might make it more difficult for smokers to get the instrument of their demise. I've got very little empathy for someone who would forsake other necessities to purchase tobacco products regardless of cost. If just a couple of people cut back or quit because of this bill, it would be worthwhile. It's not a tax increase if you don't buy tobacco products.