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Report: Proposed Cigarette Tax Hike Could Bump City Rates to Highest in Nation

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    NEWSLETTERS

    A proposed plan to increase Chicago's cigarette tax could bump the city's rates to the highest in the nation.

    To balance out his budget plans, Mayor Rahm Emanuel reportedly wants to raise the cigarette tax by 75 cents, bringing Chicago’s state and local tax rate to a combined $7.42 a pack, according to a report from the Chicago Sun-Times.

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    The city’s current 68-cent rate has remained unchanged for seven years, though the state and county have each implemented $1 hikes within the last year.

    In June, state officials said Illinois' $1-per-pack cigarette tax increase wasn't bringing in as much money as they'd hoped.

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    The year-old tax took effect in June 2012 and raised the state tax on a pack of cigarettes from 98 cents to $1.98. At the time, officials said the money would bring in desperately needed revenue, while also discouraging people from smoking.

    But the tax is expected to bring in $212 million in extra money for the current fiscal year. That's about 39 percent short of the $350 million that was projected.

    Cook County board President Toni Preckwinkle said fewer people are buying cigarettes, which explains the decline.

    Total cigarette tax revenue for the year is expected to reach almost $788 million, up 37 percent from the previous year.

    While critics say the tax hikes are responsible for the increase in illegal cigarette sales, Preckwinkle says they are necessary.

    “The higher the taxes the more you discourage young people to smoke and for me that’s critical,” she said. “This is a terrible, self-destructive habit.”

    Earlier this month, the Sun-Times reported that Emanuel was exploring a number of potential tax increases for next year, including taxes on amusements, cigarettes, liquor, and personal property lease transactions.

    But the mayor, who will present his plans for 2014 to the City Council Wednesday, made clear at a budget forum held earlier this month to discuss the city’s budget that there would be no increases in property, sales or gas taxes in 2014.