Key Findings
State Tobacco Control Policy cont'd
Cigarette Taxes
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. The revenue from cigarette taxes should be used to fund comprehensive tobacco-prevention programs, which would significantly reduce future health care costs.
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. 36
A major increase in the taxes on cigarettes 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 consumption by 7 percent for youth and consumption by 4 percent for adults. iii
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In 2003, 100,000 people quit smoking in New York City. 38
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In New York City, a significant increase in the cigarette tax (a combined city and state tax of $3.00), along with a strong smokefree air law, led to the most significant one-year drop in smoking ever recorded. In 2003, 100,000 people in New York City quit smoking, representing an 11 percent decrease in the number of smokers. Fewer New Yorkers are smoking today than at any point in the last 50 years.37 Studies also show that minority, younger and lower-income populations are more likely to reduce or quit smoking in response to a price increase.39 For example in 2003, in New York City, the smoking rate declined by 12 percent among Hispanics; 11 percent among blacks, 10 percent among Asians; and 8 percent among whites.40
2004 Highlights
Eleven states raised their cigarette taxes in 2004, increasing the average state cigarette tax by $0.12 to $0.84 per pack. iv Seventeen states, the District of Columbia and Puerto Rico are at a $1.00 or higher and three states--Michigan, New Jersey, and Rhode Island--are at or over $2.00 per pack.v Voters in three states--Colorado, Montana, and Oklahoma--successfully raised the tobacco tax through ballot measures. Virginia, home of Philip Morris, raised its cigarette excise tax from $0.025 to $0.20 per pack, the first increase since 1960.
This report finds that 12 states received an F in cigarette taxes. While a number of states significantly raised their cigarette taxes in 2004, most states still have failed to set cigarette taxes at a high enough level to significantly impact youth smoking.
| In 2002, major cigarette companies spent $34 million a day marketing its deadly products. | Looking Ahead
More and more states are realizing the positive benefits of raising cigarette excise taxes. If the current trend continues, the American Lung Association predicts that half the states will have tobacco taxes of $1 or more by the end of 2005.
iii There is general consensus among tobacco researchers that every 10 percent increase in the price of cigarettes decreases cigarette consumption by 4 percent in adults and 7 percent in children. Tauras, J., et al., "Effects of Price and Access Laws on Teenage Smoking Initiation: A National Longitudinal Analysis," Bridging the Gap Research, ImpacTeen, April 24, 2001.
iv States who passed cigarette tax increases in 2004: Alabama, Alaska, Colorado, Hawaii, Michigan, Montana, New Jersey, Oklahoma, Pennsylvania, Rhode Island and Virginia.
v States with cigarette excise taxes over $1.00: Alaska, Arizona, Connecticut, District of Columbia, Hawaii, Maine, Maryland, Massachusetts, Michigan, Montana, New Jersey, New York, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, Washington,and Vermont.
Key Findings Continued... |
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