Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

IN THE NEWS Californians Vote to Triple Cigarette Tax Sacramento, CA- Californians voted for higher cigarette taxes. Proposition 56, passed with 63 percent of the

image text in transcribed
image text in transcribed
IN THE NEWS Californians Vote to Triple Cigarette Tax Sacramento, CA- Californians voted for higher cigarette taxes. Proposition 56, passed with 63 percent of the vote, more than triples the state tax on cigarettes from 87 cents a pack to $2.87 a pack, beginning April 1, 2017. Anti-smoking groups say the higher price will reduce smoking in the state. They foresee the proportion of smokers falling from the current 11.6 percent of the population to as low as 7.1 percent by 2020 ifferent reasons. According to the state's Legislature Analyst's Office (LAO), the additional $2 per pack tax will bringin $1.27-$1.61 Economists are skeptical. Californians now purchase about 800 mlion packs a year. If the new tax billion a year to the state treasury. is to hit the high end of LAO's revenue estimate, Californians will have to continue smoking 800 million packs a year. Yet, the anti-smoking groups foresee a dramatic drop in smoking-as much as 30 percent. Both groups can't be right. The Washington-based Tax Foundation also points out that the tax hike in California will greatly increase cigarette smuggling. At present, about 12 percent of cigarettes smoked in California a smuggled in from lower tax jurisdictions. The Tax Foundation says that rate will jump dramatically once the new tax is in place. That will frustrate both the State Treasurer and anti-smoking advocates

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Computer Accounting With QuickBooks Pro 2010

Authors: Donna UlmerDonna Kay

12th Edition

0077408756, 9780077408756

More Books

Students also viewed these Accounting questions