Friday, September 20, 2013

Roll Your Own Taxpayer

The Chris Donovan, “Roll Your Own” scandal is being judicially tucked to bed now that some principals in the scandal have been sentenced.  Most recently, Joshua Nassi, former state House Speaker Chris Donovan’s campaign manager, was sentenced to 28 months in federal prison by U.S. District Judge Janet Bond Arterton.

Mr. Donovan was running for the U.S. House in Connecticut’s 5th District when his campaign was rudely interrupted by FBI wired singing canaries, prominent among them former corrections union official Ray Soucy, a character who might have done well for himself during the good old days of Tammany Hall and George Washington Plunkitt, the Tammany Hall boss who always was careful to make a sharp distinction between honest and dishonest graft.

Connecticut’s Roll Your Own tobacco shops seriously undermined the state’s effort to reduce smoking by making tobacco prohibitively expensive through punitive taxation. The Roll Your Own product could not have been punitively taxed unless the General Assembly designated such shops as “tobacco manufacturers.” Slapping that designation upon an operation in which cigarette purchasers used a machine to roll their own cigarettes was, as Mark Twain might have said, a bit of a stretcher.

Right from the start, however, the political stars were aligned against the Roll Your Own Tobacco shops, which were springing up like poisoned mushrooms all over the state. And, unforgivably, these mushrooms were not subject to the same exorbitant tax levied on Big Tobacco.

While the tobacco tax is the state’s most egregious example of punitive taxation, Connecticut’s tax on gasoline – the environmentally bad stuff people put in their cars so they might get to work and pay more taxes – is the highest in the nation. The gas tax is actually two taxes: a tax paid at the pump and a gross receipts tax, hidden from purchasers, levied when the product arrives in port, both of which were supposed to be sequestered in a special fund for road maintenance. The so called road maintenance tax has long since been dumped into the state’s General Fund. Some voices in the state’s Democratic dominated General Assembly lately have been raised to resurrect tolls to pay for much needed road and bridge maintenance.

Always starving for tax receipts to pay for a budget that has increased threefold since former Governor Lowell Weicker and Democrats in the General Assembly imposed an income tax on the state, a bill was put forward in the General Assembly to designate Roll Your Own tobacco shops as “tobacco manufacturers.” So designated, the Roll Your Own shops would be subject to the same exorbitant and punitive taxes levied on Big Tobacco. This is the bill that became the snare that caught Mr. Nassi and others in its iron and unforgiving jaws.

Punitive taxes are always imposed under a flag of concern and compassion. Smoking is bad for your health, and it increases the cost of health care. Why should people who are not addicted to smoking pay higher insurance premiums because smokers choose to pollute their lungs? Who would mind paying exorbitant taxes on gasoline, if they could be certain the taxes would be dedicated to road and bridge repairs? Cars that do not depend on gasoline are more environmentally friendly, and high gasoline taxes are a way of driving up the cost of gas guzzling cars so that future purchasers would be more inclined to “invest in” more environmentally friendly modes of transportation. Better still, these tax dollars can be used to make necessary “investments” in public transportation such as the New Britain to Hartford fast-track bus line.

Such is the irresistible zeitgeist in Connecticut: What fool could possibly object to high taxes if it can be shown that the taxes are used for benevolent purposes by a prudent and compassionate state? Taxpayers in Connecticut should know their public officials will use such punishing taxes wisely. The benefits of high taxes far outweigh the disadvantages of high taxes. Any idiot can see that. And any idiot can see that low tax Roll Your Own smoke shops kicked against the pricks

What? A low tax tobacco product in Connecticut?  You gotta be kidding me. Why, everyone knows that low tax products drive from the market high tax products. And they rob tax resources from a benevolent Peter who is robbing taxpayers to pay Paul. Why, dear me, think of the collapse of benevolence that would occur if state government were deprived of tax resources.  Just to begin with, Governor Dannel Malloy would not be able to supply dwindling tax resources to multimillion dollar Connecticut based companies in order to bribe the companies to remain in Connecticut and refrain from moving operations to low tax, low regulatory states. In a low tax, low regulatory environment, tax consumers would have to do more with less. Where would we be then?

Low tax Roll Your Own smoke shops fell to this remorseless logic. They were doomed from the beginning. It only took a slight nudge and a little canary-wiring from the FBI to topple them over the edge.   

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