Key Findings
Cigarette Taxes
View the State Rankings for Cigarette Taxes
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Top Excise Tax Increases in 2003 |
1. New Mexico +$0.70
2. New Jersey +$0.55
3. Montana +$0.52
4. Wyoming +$0.48
5. Nevada +$0.45
6. Connecticut +$0.40
7. Rhode Island +$0.39
8. West Virginia +$0.38
9. Delaware +$0.31
10. Idaho +$0.29 |
The potential benefit of raising cigarette taxes is enormous. Higher taxes make cigarettes more expensive, which deters kids from starting to smoke and motivates adults to stop. Tax monies should be used to fund comprehensive tobacco prevention programs and lower health care costs in the future. And, in today’s era of state financial woes, raising tobacco taxes can help plug budget holes.
States that take positive action now to curb smoking will see their health-related costs gradually decline as prevention and cessation programs reduce tobacco use and tobacco-related disease. The CDC estimates that each pack of cigarettes sold in the United States costs the country $7.18 in medical care costs and lost productivity.23
A major tax increase on tobacco products will rapidly and significantly reduce the number of children who start smoking and encourage many adults to quit. For instance, studies have shown that a 10 percent increase in the price of cigarettes reduces smoking by 7 percent for youth and consumption by 4 percent for adults. 24
Additionally, the CDC found that minority, younger and lower-income populations would be more likely to reduce or quit smoking in response to a price increase. 25
Policy Goals
The American Lung Association encourages the following actions:
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Enacting significant increases in the excise tax on all tobacco products;
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Indexing tobacco taxes to ensure that they will, at a minimum, keep up with inflation; and
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Designating a portion of the tobacco tax revenue to cover tobacco education, prevention and cessation programs.
Bright Spots
Sixteen states and the District of Columbia raised their cigarette tax in 2003, increasing the average state cigarette tax by a dime to $0.72 per pack.26 Fifteen states and the District of Columbia are at a dollar or higher.27 For the first time, southern tobacco-growing states seriously looked at raising tobacco taxes in 2003. Georgia followed Tennessee’s 2002 increase, to be among the first states in this region to increase the cigarette tax. Georgia more than tripled its tax to $0.37 per pack—the first tax increase since 1971. New Mexico more than quadrupled its cigarette sales tax from $0.21 to $0.91. Legislatures in North Carolina, Kentucky and Virginia had cigarette tax increase proposals introduced (though not approved)—a victory in and of itself.
Work To Do
This report finds that thirteen states received an F in cigarette taxes. While a large number of states raised their cigarette taxes in 2003, states still have failed to set cigarette taxes at a high enough level to significantly impact youth smoking.
Looking Ahead
More and more states are realizing the positive benefits of raising the cigarette excise tax. If the trend continues, the American Lung Association predicts that half the states will have tobacco taxes of $1 or more by the end of 2004.
Key Findings Continued... |
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