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OCR Page 1 of 4204/29/98
13:40
202 637 1506
Smoke
3
The Washington
Times
A
12
FEB 09 1994
Canada slashes tobacco taxes
TAXING
Cigarette smuggling killed revenues
TOBACCO
Canada is moving to cut its
By David Hatter
taxes here relies heavily on the
sky-high cigarette taxes at the
THE WASHINGTON TIMES
Canadian experience as a role
same time the Clinton
model." wrote the congressmen. "II
administration is proposing to
OTTAWA
The Clinton admin-
is largely because of your success
raise cigarette taxes. The size
istration had hoped to use Canada
that we and our friends in the
of tax CUT will vary
where tobacco taxes are eight times
American health community now
depending on how deeply the
higher than in the United States to
find it possible to argue persuasively
provinces cut their own taxes.
show that such
levies can simulta-
for such significant increases here."
neously reduce
consumption and
The five signatories were Michael
Ontario (current)
raise revenues.
Andrews of Texas, Mike Synar of
Federal and provincial tax
Bur the plan's opponents received
Oklahoma, Richard Durbin of Iili-
(20 cigarettes):
$2.65
& boost yearday when the Canadian
nois, Henry Waxman of California
Average retail price
government announced it will roll
and Pere Stark of California.
per package:
$3.57
back tobacco taxes in order to stem
Meanwhile, a spokesman for the
a flood of contraband cigarettes
White House health care unit said:
Ontario (proposed)
pouring in from the United States.
"We wish Canada would be patient.
Federal and provincial tax
"The U.S. tobacco industry is salt
The smuggling problem is
gener-
(20 cigarettes):
$2.30
vating over what's going on in
ated by American tax policy. We're
Average retail price
Canada," said John Bloom. policy di-
trying to change that".
per package:
$3,19
rector of the American Cancer Soci-
President Clinton's budget un-
United States (current)
cry. "They will use any tax rollback
veiled this week called for raising
in Canada to mislead the American
the tax on a package of 20 cigarettes
Federal tax
public into believing that tobacco
$0.24
by 75 cents to a total of 99 cents a
(20 cigarettes):
taxes don't work"
Average relall price
help fund universal health coverage.
per package:
52.01
The Canadian action comes in re-
Some members of Congress are
sponse a a massive smuggling prob-
pushing for an increase of as much
United States (proposed)
lean caused by the huge difference in
as 52 a pack.
Federal tax
U.S. and Canadian cigarette prices.
But Mr. Chretien decided he could
(20 cigarettes):
$0.99
On average, cigarettes to Amer-
not wait for U.S. action and ignored
Average retail price
lean dollars- cost $2 a pack in the
all the please Federal taxes will be
per package:
$2.76
United States and $3.50 in Canada.
cut by between $3.75 and $7.50 on a
More and more Canadian. smok-
Quebec (current)
carton of 200 cigarettes, varying by
are are buying contraband ciga-
province based on how much each
Federal and provincial tax
rettes smuggled in from the United
provincial government curs its own
(20 cigarettes):
$2.68
States to avoid the cares on legal
taxes.
Average reall price
smokes.
per package:
$3.57
"Much as we may all regret the
The American Cancer Society, to
necessity B lower cigarette taxes,
gether with the American Heart As-
Quebec (proposed)
we must de 30 until we have put the
sociation and American Lung Asso-
smuggling nerworks out of busi-
Pederal and provincial tax
ciation, wrote to Prime Minister
ness," Mr. Chretien said. "Then we
(20 cigarettes):
$1.11
Jean Chrerien last week. urging him
Average retail price
will be able to restore an appropriate
a reconsider the tax rollback. A
$2.00
level of taxacion."
per package:
similar letter was sent by a group of
Sources: These institute,
At present, a carton in Canada
Government of Canada
five congressional Democrats.
costs $35 (U.S.), of which more than
THE washington Times
"The campaign to raise tobacco
three-quarters comprises federal
04/26/98 TUE 14:26 [TX/RX NO 5016]
002
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