U.S. states curb smoking, plug budget holes by raising cigarette taxes

What's the best way to curb smoking habits and plug budget holes? Raise cigarette taxes.
Written by Andrew Nusca, Contributor

What's the best way to curb smoking habits and plug budget holes? Raise cigarette taxes.

So far, Utah legislators have raised cigarette taxes by $1.00 per pack and New Mexico has raised them by $0.75 per pack, with another half dozen U.S. states considering increases, including Washington, South Carolina, Kansas and Georgia, according to a USA Today report.

The last time cigarette taxes were raised was in 2009, when 14 states and the District of Columbia raised them. But raises have historically been few: this is just the tenth time since 1950 that this many states have raised cigarette taxes, according to the Centers for Disease Control and Prevention.

Here's the breakdown of how cigarettes are priced:

  • Federal tax: $1.01 per pack
  • State tax: $1.34 per pack, on average. (This varies considerably: Rhode Island's tax is $3.46 per pack, South Carolina's is $0.07 per pack.)
  • Average state sales tax: $0.27 per pack
  • Actual materials: $2.97 per pack

That totals about $5.59 per pack, on average. With roughly 46 million Americans who smoke, the money can add up.

The argument against taxes: Smokers will buy cigarettes in states where they are cheaper, or simply buy black market product. About one-fourth of smokers have incomes below the poverty line, according to the article.

The argument for taxes: Budget shortfalls means states may have to let go state workers and cancel public services.

The public health argument: For every 10 percent price increase, cigarette consumption drops by three to four percent among adults and double that among youth.

This post was originally published on Smartplanet.com

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