By Patrick M. Gleason
New Yorkers already face the nation’s highest tax burden, but that isn’t stopping Gov. Andrew M. Cuomo from coming up with new and creative ways to separate taxpayers from their income. In fact, Cuomo has decided to exploit a national tragedy with his latest tax hiking gambit.
Making New York the first state in the nation to impose a special tax on opioids is one of Cuomo’s top priorities for 2018. Cuomo’s logic is that making these painkillers more expensive will combat opioid addiction, despite the fact that, by definition, addicts are the least price-sensitive population out there. Here Cuomo is taking the Rahm Emanuel approach to raising taxes, in that he and other proponents of this regressive levy are not letting the opioid crisis go to waste when it comes to their desire for more taxpayer dollars.
Cuomo’s proposed opioid tax represents a shameless attempt to exploit a crisis that has caused real tragedy in New York and other states across the country. This appears to be the new tax fad of 2018, as other states are also considering legislation to impose an opioid tax. It’s politicians’ latest ploy to siphon more money from the private sector, pushed under the guise of false altruism. Just as bag taxes do not reduce litter and soda taxes do not cut down on obesity, an opioid tax would do nothing to address the opioid crisis or mitigate addiction.
Another problem with Cuomo’s proposed opioid tax is that by instituting such a levy, the New York government would be taxing itself. That’s because the state’s Medicaid program covers one-third of the state’s population. As such, the state purchases approximately a third of opioids consumed. As such, a portion of an opioid tax hike’s $125 million price tag would be borne by New York taxpayers in the form of higher Medicaid costs.
Cuomo and his staff have claimed the cost of this new tax would not be passed along to end consumers, but their own talking points contradict that claim. Of the proposed opioid tax, Cuomo’s budget briefing book claims that the new levy “is expected to provide a financial disincentive for the use of these drugs.”
So here we have the Cuomo administration claiming the cost of the opioid tax wouldn’t be passed along to end consumers, while also claiming that the new tax will make opioids more expensive, thus serving as a disincentive on consumption. So which is it? It can’t be both.
Those who are skeptical that opioid tax revenue would be well spent have reason for concern. Cuomo’s opioid tax is projected to raise $125 million, yet Cuomo’s budget does not call for a $125 million increase in drug treatment. Rather than institute a new tax that would hit those who can least afford it the hardest and do nothing to address the opioid crisis, state lawmakers should instead work to rectify Albany’s addiction to overspending.
Patrick M. Gleason is director of state affairs at Americans for Tax Reform.