Posts Tagged ‘health’

Sin Tax Debate Focuses On Public Health Benefits, Revenues, Effects On Business

By Sean Whaley | 1:16 pm April 5th, 2011

CARSON CITY – Advocates for a tax hike on cigarettes and liquor made their case in the Nevada Legislature today, both to raise revenue and improve public health.

The proposal received a mixed reaction from lawmakers, and some lobbyist opposition, however, because of the negative consequences on business.

The Assembly Taxation Committee heard a proposal from Assemblywoman Peggy Pierce, D-Las Vegas, to increase the tax from 80 cents on a pack of cigarettes to $1.70. Her measure would also increase liquor taxes.

Nevada Assemblywoman Peggy Pierce, D-Las Vegas, testifies on her "sin" tax bill today. Photo by Cathleen Allison/NevadaPhotoSource.com

The Senate Revenue Committee also heard a separate measure to increase the cigarette tax to $2 a pack.

Pierce said her goal with Assembly Bill 333 is increasing general fund tax revenue, but a number of health advocates testified in support because of the public health benefits of increasing the tax on tobacco. They noted that smoking rates for both adults and children would decrease with the proposed cigarette tax hike and the increase on other tobacco products.

The Nevada Department of Taxation estimates that about $250 million would be generated over the two years of the budget if the tobacco and liquor tax hikes are approved as proposed.

“I believe this state will be devastated if we do not raise revenues,” Pierce said.

The cuts being proposed in Gov. Brian Sandoval’s budget will take a minimum of a decade to recover from, she said.

Pierce’s bill is the first tax proposal to get a hearing this session.

But the proposals to increase “sin” taxes in the Nevada Legislature face the same roadblock of any other revenue proposals being considered by some lawmakers this session: Sandoval’s unwavering rejection of any tax or fee increases to balance the budget.

This position includes increases in cigarette and liquor taxes, said spokeswoman Mary-Sarah Kinner.

Advocates for the cigarette tax point to a survey of Nevada voters showing strong support for the measure as a way to raise tax revenue.

Assemblyman Ed Goedhart, R-Amargosa Valley, who said he smokes an average of a pack of cigarettes a week, agreed that hiking the tax is a good way to raise revenue if the objective is to correct unhealthy behavior.

But Goedhart said obesity is a bigger health issue, and that a tax on calorie consumption could generate public health benefits as well.

He questioned why the Legislature would want to single out smoking among the many unhealthy activities engaged in by the public at large if the objective is to improve the health of Nevadans.

“I mean where does it stop,” Goedhart said after the hearing. “Then it becomes a form of nanny government. Are we going to do a body mass index and charge a person more taxes because they are going to be a burden on the health system because they are going to have the possibility of weight related health issues?”

The proposed increases generated opposition from a variety of groups.

Katie Jacoy, representing the Wine Institute, a public policy association representing 897 California wineries, submitted testimony in opposition to the increases in the alcohol tax in AB333 because of the significant increase proposed on wine and other alcoholic beverages.

“This proposed tax increase will ultimately harm the responsible wine consumers in Nevada by increasing the price of wine, which is difficult to bear in tough economic times,” she said.

“Under the bill, the excise tax on wine with an alcohol content of 14 percent or less would increase from 70 cents to $1 per gallon, and on wine with an alcohol content above 14 percent would increase from $1.30 to $1.75 per gallon. Given Nevada’s 6.85 percent sales tax that also applies to wine, consumers in Nevada will likely pay one to the highest prices in the U.S. for their wine.”

These price increases will be passed on to the consumer, Jacoy said.

Much of the testimony focused on the cigarette tax, which was last increased in Nevada in 2003. Nevada ranks 35th lowest in its tax rate. New York is the highest at $4.35 a pack, while Missouri is lowest at 17 cents, she said.

California’s cigarette tax is now 87 cents but a $1 increase in the rate is being considered.

One area of opposition to the bill came from premium cigar businesses in Nevada.

Michael Frey, owner of FreyBoy Tobacco, a business that operates six premium cigar shops in Las Vegas, spoke in opposition to the proposed increase in tobacco products other than cigarettes from 30 percent of the wholesale price to 55 percent.

If the increase was approved, Frey said he would close four of his six shops and lay of 35 of 50 employees. Cigar smokers would just begin purchasing their tobacco products over the internet, which is legal, he said.

“Cigar smokers will not quit smoking cigars because it is not an addictive product,” Frey said. “They will simply go on the internet and buy the products with no taxes associated with them and have it shipped into their houses in Nevada.”

There was also concern expressed by some of those testifying that raising liquor and tobacco taxes will cause consumers to purchase their products over the internet.

Goedhart said it may not be legal to purchase cigarettes over the internet to avoid state tobacco taxes, but any projected revenues from a tax increase will be affected by this practice. Goedhart said he found cigarettes for sale on the internet after just a quick search on his computer.

“If we increase the tax we may be increasing tax evasion behavior,” he said.

Peter Krueger, representing the Nevada Petroleum Marketers & Convenience Store Association, among other interests, agreed that consumers would likely seek out cheaper alternatives to avoid the tax.

In her concluding remarks, Pierce said: “I think that if we don’t make a considerable course change, I think that when people can begin to sell their houses again, they will go back to the states that they came from with bigger governments and higher taxes, and a better education system, and museums and libraries and all of the things that come from creating community through the collection of taxes.”

Audio clips:

Assemblywoman Peggy Pierce says people will leave Las Vegas when they can afford to do so if changes aren’t made:

040511Pierce1 :17 and higher taxes.”

Pierce says they will return to states with all of the amenities that come from the collection of taxes:

040511Pierce2 :15 collection of taxes.”

Assemblyman Ed Goedhart says raising taxes to curb smoking is Nanny State behavior:

040511Goedhart1 :17 weight-related health issues.”

Goedhart says raising cigarette and liquor taxes could lead to tax evasion:

040511Goedhart2 :11 variety of ways.”

Cigar shop owner Michael Frey says he will close some of his shops if the tobacco tax increase is approved:

040511Frey1 :15 I now have.”

Frey says cigar fans will just buy the product over the internet:

040511Frey2 :15 houses in Nevada.”

 

 

Nevada Small Business Owners Support Key Aspect Of Obama Health Care Law

By Andrew Doughman | 4:00 am February 28th, 2011

CARSON CITY – A new study shows support for Gov. Brian Sandoval’s plan to implement President Barack Obama’s national health care reform law.

Nevada small businesses prefer a health insurance exchange crafted in Nevada rather than one created and implemented by the federal government, according to a survey from the local branch of the National Federation of Independent Business.

The small business association is the only private organization suing with 26 states, including Nevada, against the Patient Protection and Affordable Care Act, the law sometimes called “Obamacare.”

Nevada’s government has chosen to adhere to the law’s deadlines until a definitive court ruling either upholds or strikes down the law. In doing so, the state government has more say in meeting the law’s mandates.

About 100 businesses responded to the poll’s question: “Should Nevada establish its own health insurance exchange instead of deferring to the federal government?”

A majority, 55 percent, said Nevada should be in charge while 19 percent voted ‘No,’ Nevada should not be in charge.

The remaining 26 percent were undecided, perhaps revealing that the law’s intricacies are still new to some business owners.

Many are familiar with the “individual mandate” that sets a deadline for the imposition of penalties for not having health insurance. This is the aspect of the law most frequently called “unconstitutional” by those like Sandoval and others suing to have the law overturned.

The health care insurance exchange is a less-trumpeted piece of the law that could act like a clearinghouse for first-time individual and small business buyers. It’s supposed to be active by 2014, but the planning has already started.

Nevada has hired a Massachusetts-based contractor to help set up what is essentially a Travelocity or Expedia for health insurance; it would find the best deals for a buyer based the buyer’s preference and other personal criteria.

It’s an important concept for small businesses because the federal law allows businesses with up to 50 employees to purchase “qualified” health insurance plans through the exchange. One question Nevada’s policymakers will have to answer is whether the state’s exchange should have a separate division just for small businesses.

Two public meetings, one in Las Vegas and one in Reno, are slated for this Tuesday and Wednesday to allow public comment regarding Nevada’s exchange.

Some policymakers are also entertaining the idea of establishing such an exchange even if the federal law is ruled unconstitutional.

“Regardless of whether this bill gets repealed or not, I have a feeling that health care exchanges will be part of the future anyway,” said Randi Thompson, the local representative for the National Federation of Independent Business.

As KUNR reported earlier this month, Mike Willden, the director of the state’s Department of Health and Human Services, has also talked with Sandoval about decoupling the federal law’s mandates and Nevada’s health insurance exchange.

“He [Sandoval] thinks there may be some sense in having a health insurance exchange even if the Supreme Court strikes down the law,” Willden said Friday outside of a committee hearing about the federal health care law.

The National Federation of Independent Business conducts a poll annually so that its lobbyists have some direction for their efforts during legislative sessions nationwide.

In Nevada, the poll’s three other questions were not nearly as controversial as the health insurance exchange question. Among respondents, 77 percent said they would favor penalties for businesses hiring illegal immigrants, 72 percent would support tax exemptions or incentives to promote job growth and 75 percent would endorse a 401(k)-style retirement plan for new government workers.

Thompson said she sent the poll to the approximately 2,000 Nevada members of the National Federation of Independent Business, and said that the 100 respondents represented a “broad spectrum of businesses.”

Gibbons Will Ask Nevada Attorney General to Weigh in on Constitutionality of Reid Health Care Bill

By Sean Whaley | 4:47 pm December 23rd, 2009
CARSON CITY – Gov. Jim Gibbons said today he will ask the state attorney general to review the health care legislation scheduled for a vote tomorrow in the U.S. Senate to determine if it violates the U.S. Constitution by forcing everyone to have health insurance.

Gibbons said governors in several states have asked their legal advisors to perform such a review. Earlier today, the bill survived a challenges by Republican Senators led by Sen. John Ensign, R-Nev., seeking an examination of the bill because of the constitutionality question on the health insurance mandate.

In addition to seeking the review, Gibbons continued to attack the measure pushed by U.S. Senate Majority Leader Harry Reid, D-Nev., for “handing out billions of dollars in taxpayer financed ‘inducements’ to muster the votes needed to pass his health care package.”

Gibbons also responded to a comment by Reid spokesman Jon Summers made earlier this week that he should read the legislation before criticizing it.

“We have read the bill and that’s exactly what troubles us,” Gibbons said. “Sen. Reid keeps saying his enticements to other senators to coerce them to support his bill are just compromise and politics as usual. But if any citizen used these tactics in day-to-day business deals, they would be led away in handcuffs and charged with bribery.”

Summers responded: “Jim Gibbons has made it very clear that his plan is to continue using taxpayer dollars to fund political hits on Sen. Reid by parroting the national Republican Party’s talking points.

“As the governor of a state with the second highest rate of uninsured in the country, this self-proclaimed fiscal conservative thinks it’s fine for taxpayers to foot the bill for people whose only option to see a doctor is in the emergency room.”

Summers also said: “Gibbons would rather 24,000 small businesses not receive the tax credit Sen. Reid included to help make it more affordable for them to provide insurance to their employees. And while Nevada families are scraping to get by, he thinks it’s better for them to miss out on a $1,600 savings on their insurance premiums.”

Gibbons said the Senate version of the health care legislation will cost state taxpayers $613 million over six years beginning in 2014 when a three-year federal payment to cover the cost of an increased Medicaid caseload goes away.

Gibbons said after a review of the legislation, “It is clear that many businesses will find it more profitable to pay a federal penalty and end the health insurance they provide to their employees. Those working families will be forced onto Nevada Medicaid. This, alone, will make the state Medicaid enrollment bulge beyond affordable capacity. This will also cut off health insurance many Nevadans presently enjoy.”