Ballot Proposition 29 - Cigarette Tax 2011. Research Paper Example.

2021-07-19 21:56:28
7 pages
1776 words
University/College: 
University of California, Santa Barbara
Type of paper: 
Research paper
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Ballot proposition 29 was a state statute in California that was presented during the 2012 presidential primary ballot. Ballot proposition, Tobacco Tax for Cancer Research Act, was narrowly defeated. Proposition 29 was put in place to help raise funds for cancer menace and other related diseases through the imposition of additional excise tax on cigarette packs. A tax of one dollar per package and comparable tax increase in tobacco products was to be imposed. The California Cancer Research Act was to raise the tax rates on tobacco products. The California state government was to be entitled to $ 1 excise tax on cigarettes producers and sellers (Feng, Miao, et al. 434). In return, the producers and seller will recover the increased tax through an increase in the prices of tax products.

Ballot measures to increase cigarette duty by 1 US dollar is too close to go for but is hardly trailing. The next measure o alters legislative term restrictions won readily by 60.3% approval. The proposition will revise the term strictness by reducing the total numbers of years spent by politicians in Sacramento while up surging the time limit the same politicians may serve in state Senate or State Assembly respectively. Proposition 29 is projected as that which will increase the state levy on the cigarette by 1 US dollar to solicit money for cancer study as well as anti-smoking programs. Being against the proposition, Tobacco companies channeled millions of dollars in the race with the hope that the measure is defeated while preventing the smoking topic.

The government in the event of imposing high taxation scheme on cigarette consequently increases the opportunity cost of smoking. An increase in the opportunity cost of the cigarette thus decreases the demand for the cigarette in the market. Once the government imposes taxes and puts into place the necessary task force for ensuring its implementation, the public, particularly the smokers, get to the feel of the cost of smoking as buying cigarette becomes an expensive venture to them. Expenditure on cigarettes once heavy duties are put in place also becomes kind of an increase in the expense straining the smokers' pockets and as such a good percentage automatically quit smoking or opts for a more economical smoking routine hence reducing the smoking frequency. The move towards smoking reduction also ensures that public health levels are adhered to as the number of smokers in the economy goes down and as such lowering the essence risk levels for contraction cigarette smoking-related diseases for like lung cancer and others.

The taxation strategy aims at the reduction of smoking majorly targeting the youths and the low-income earners in the economy. There are reported high health costs for tobacco usage; the tax imposition strategy would relief the costs as it targets to reduce smoking rates as well as providing a bragging ride for achieving substantial gains in health sectors (Wright et al., 2017, p 583). Families and children would be beneficiaries of this scheme as there would be expanded available premises and an expansive education for childhood which would be financed by the tax revenues generated from tobacco. The proposition by the head of state was in line with the interest of the country which is an economic giant on the global map.

Under proposition 28, politicians can only go for twelve years in Sacramento. However, all the 12 years can be spent in Assembly or Senate for that matter. The time can still be subdivided making lawmakers serve for six years in the Assembly and the remaining 6 in the Senate. The result is that politicians will always be in the Assembly more than half or 50% more time in the Senate house and only serve for a short period in Sacramento. Lawmakers already in office are not affected by this initiative. Pro.29 was supported by the Cancer Society of America, the Lung Association of America, and the American Heart Association. The same proposition was also backed up by the champion cyclist as well as the Lance Armstrong cancer survivors. Proposition 29 escalates the state tax on tobacco from 86% to 1.88 US Dollars. If assented it is projected to raise up to $760 million annually for studies and smoking stoppage programs (Feng, Miao, et al. 435).

Proposition 29 has interesting twists and turns since it had a noble course, to improve the health system. The funds raised from the taxation were to be channeled to medical research on cancer. The consumption of tobacco products could have gone down thus reducing the effects of tobacco that are adding the weighed down health system. It is however intriguing that Proposition 29 failed to sail through although the implementation seemed to favor the majority of the citizens (Caulkins, Jonathan P., et al. 871).

History

The California state law currently imposes a tax of 0.87 dollars per cigarettes pack that are produced and distributed in the state. The funds from this tax are channeled towards special fund purposes and the state's General Fund. The cigarettes were first subjected to taxation in 1959 at California State; the tax was at 0.03 dollars per cigarette packet. The taxation rate tripled in 1967; 0.10 dollars per packet. The funds that were collected were directed to the state's general fund (Matsusaka, John 313).

In 1988, Proposition 99 was put in place through the California Tobacco Health Protection Act that was put in place in 1988. The voters in California approved the channeling of cigarette taxation to special funding use. The taxation on cigarettes under proposition 99 was increased to 0.25 dollars per packet with a similar amount imposed on the products associated with tobacco (Matsusaka, John 331). The funds that are collected through proposition 99 are directed to tobacco prevention efforts, tobacco education, research programs aimed at tobacco-related diseases, environmental protection, health services for uninsured and low-income citizens and recreational activities.

Proposition 29 creates a fund under which the taxes are directly channeled. Returns from the tax to be imposed on tobacco were to be channeled to the compensation of already existing programs which might be suffering due to the implementation of the new taxation act. The remaining funds were to be directed to other funds such as Law Enforcement Fund. The Law enforcement Fund was to be allocated 3 % of the collected taxes to ensure a reduction in the unlawful activities that are related to tobacco (Feng, Miao, et al. 434).

Description

Proposition 29 was intended to impose an additional tax of five cents per one cigarette distributed which is approximately one dollar per a packet of cigarettes. The equivalent tax increase was to be imposed on other tobacco products in California State. The increased taxation was to be directed to the cancer research center and other special purposes as noted in the state budgetary process. The tax revenues from the tobacco products will have a special fund where the funds will be deposited and later directed to research, detection, and prevention, treating, and the cure of cancer, emphysema, heart diseases, and other tobacco-related diseases (Feng, Miao, et al. 434). A nine-member committee was to be charged with the administration of the fund.

Analysis

Supporting groups

The proponents of Proposition 29 had raised $ 1,484,480.63 by 20100. The main contributors to proposition 29 include American cancer society, Californian for the cure, American Lung Association, Cancer Research Doctors, and the American Heart Association. State senator and cancer survivor Don Perata gave a contribution of $ 70,512.96 for proposition 29. Other contributors and supporters of the act include Los Angeles Mayor Antonio Villarosa and the American cancer society, and Cancer Action Network that contributed $ 24,766.00 (Feng et al., 2017).

The proponents argue that proposition 29 is bound to reduce the smokers in California. They opine that increasing the cigarettes price will lead to few people purchasing and consuming cigarettes. An estimated 228,700 children that are in California will be shielded from being adult smokers. The adults could also be discouraged from smoking due to an increase in the prices.

The proponents opine that cigarette smoking leads to diseases such as cancer. An increase in the prices of tobacco products will discourage the smoking habit leading to reduced cases of tobacco-related diseases. The tobacco-related diseases are a burden to the health system, and therefore a reduction in such diseases will ease the burden on the health system (Feng, Miao, et al. 434).

Provision of funds for cancer and other medical research is one of the tenets propagated by the proponents of Proposition 29. Taking up the measures propagated in the new act is bound to offer the necessary funds that can enhance the medical research on cigarette-related diseases, strokes, cancer, lung diseases, and heart-related diseases.

Opposing Groups

The opposition to Proposition 29 was able to receive $ 2,673,308.17 in 2011 through the contributions of UST LLC, Philip Morris USA, small businesses, and the coalition of taxpayers, law enforcement, and labor. The main reasons behind their opposition are the possible increase of California's financial problems, the possible taking of money out of California, and the fact that black market and other crimes will increase (Feng, Miao, et al. 434).

Proposition 29 will increase the financial problems in addition to the economic crisis in California already. The possible additional spending by the government through Proposition 29 will pass the financial burden to the citizens (Hajnal, Zoltan L., Elisabeth R. Gerber, and Hugh Louch 177). The funds to be raised through Proposition 29 do not offer a possible solution to the existing budget deficit of more than $ 10 billion in California. Therefore there is no need creating additional spending that might increase the deficit.

Without clear guidelines, the opponents felt that the spending of the funds to be raised might be out of the state. Proposition 29 does not indicate whether the raised funds will be exclusively used within the California state or the United States of America or outside the country (Hajnal, Zoltan L., Elisabeth R. Gerber, and Hugh Louch 177).

Conclusion

The excise tax of $0.87 currently in California is among the least in the United States. Proposition 29; the California Cancer Research Act would see an addition of $1 in the excise tax on tobacco products will make California State be among the highest excise tax paying in the United States of America. The excise tax that will be in place after proposition 29 will be above the country's mean excise tax of $1.46. Proposition 29 is therefore untenable in the state of California.

 

Works Cited

Caulkins, Jonathan P., et al. "Design considerations for legalizing cannabis: lessons inspired by the analysis of California's Proposition 19." Addiction 107.5 (2012): 865-871.

Feng, Miao, et al. "Twitter analysis of California's failed campaign to raise the state's tobacco tax by popular vote in 2012." Tobacco control 26.4 (2017): 434-439.

Hajnal, Zoltan L., Elisabeth R. Gerber, and Hugh Louch. "Minorities and direct legislation: Evidence from California ballot proposition elections." The Journal of Politics 64.1 (2002): 154-177.

Matsusaka, John G. "Election closeness and voter turnout: Evidence from California ballot propositions." Public Choice 76.4 (1993): 313-334.

Wright, Alexandra, Katherine E. Smith, and Mark Hellowell. "Policy lessons from health taxes: a systematic review of empirical studies." BMC public health 17.1 (2017): 583.

 

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