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Maryland cigarette tax increase of 50% proposed, following alcohol tax hike

October 7, 2011

National Bohemiam beer mug Just a couple of months ago, an alcohol tax hike pushed up the price of Maryland's Natty Boh. And now a move is underway to make the smokes you light up as you enjoy your beer more costly, too.

These two sin taxes, the name given to levies on what are usually unpopular or unhealthy habits, are the latest ways Maryland is looking at to boost its bottom line.

On July 1, the Old Line State's tax on beer, wine and liquor increased by 50 percent, from 6 percent to 9 percent.

The higher booze tax is expected to bring in $85 million in its first year of collection. The money is targeted for school construction and programs for the developmentally disabled.

Cigarette butt smashed Now a public health group is seeking a 50 percent increase of Maryland's tobacco tax, raising it from $2 per pack of cigarettes to $3 per pack.

The Maryland Citizens' Health Initiative also plans to lobby for higher taxes on other tobacco products, such as cigars and smokeless tobacco.

The current state excise tax on these other tobacco products is 15 percent, but the anti-smoking group has not announced a specific rate or increase amount it would like to see enacted.

The silliness of sin taxes: What would governments do without sin taxes?

The offending habits or products these taxes are designed to correct are easy targets. And lawmakers always try to make it seem like the tax is noble and worthwhile.

Yep, sin taxes are a great way to shape social policy and make people shape up, right?

Wrong. Sin taxes are lazy tax policy.

That's why we have so many states with anti-smoking and anti-drinking tax laws, Uncle Sam's tanning tax and Denmark's fat tax.

Pick your perceived sin and have at legislating it out of existence.

Good luck with that.

Lawmakers should quit falling back on these easy tax laws. At the very least, they should be honest about why a sin tax is being enacted, as I note over at my other tax blog:

"The people wagging their fingers and nagging are happy because the folks with bad habits are being punished by higher taxes. Lawmakers are happy because they get to approve a tax that won't cost them their jobs. And state treasurers are happy because they keep getting money.

Now if we could only figure out a way to tax self-righteousness, every government would be rolling in dough."

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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