Would a Higher Cigarette Tax Get You to Quit?

A proposal to raise the federal cigarette tax would increase the per-pack rate to $1.95. That’s in addition to the state tax on cigarettes, which is already much higher in some states. Too expensive for you?

Would a Higher Cigarette Tax Get You to Quit? Photo (cc) by Fried Dough

You’ve probably heard that President Obama has proposed a 94-cent-per-pack increase in the federal tax on cigarettes. The additional $78 billion in revenue over 10 years would be used to pay for expanded preschool education — called “Preschool for All.”

The federal tax last increased in 2009, from 39 cents to $1.01 per pack — prompting lots of complaints from smokers. The new tax would nearly double the rate.

The Campaign for Tobacco-Free Kids estimates the increase would prevent 1.7 million kids from becoming smokers, thus preventing 626,000 premature deaths and saving $42 billion in health care costs. The organization says that 18.1 percent of high school students are smokers and nearly 1,000 kids pick up the habit every day.

It also says the higher tax would “prompt 2.6 million adult smokers to quit and save 18,000 lives by 2021.”

The prediction about youth smoking makes sense. Young people have less spending money, and many are too smart to pick up a vile habit that ruins health and makes your breath stink.

But what about the adult smokers out there? Ask yourself, if you smoke, or ask loved ones who do whether that higher tax would make cigarettes unaffordable or too expensive to rationally justify the behavior.

Let’s look at what you’re spending on tobacco right now.

In addition to the federal tax, smokers are paying state taxes on cigarettes and perhaps city taxes too. A chart from the Federation of Tax Administrators listing the state tax in all 50 states and Washington, D.C., as of Jan. 1 identifies the states with the highest cigarette taxes as:

  • New York, $4.35 a pack. (To get the rate by carton, multiply by 10.)
  • Rhode Island, $3.50.
  • Connecticut, $3.40.
  • Hawaii, $3.20.
  • Washington state, $3.02½.

The five lowest state tax rates are:

  • Missouri, 17 cents.
  • Virginia, 30 cents.
  • Louisiana, 36 cents. The legislature there is currently considering an increase, as are lawmakers in some other states.
  • Georgia, 37 cents.
  • Alabama, 42.5 cents.

The average cost of a pack of cigarettes in the U.S. is $6 (more than $2,000 a year for pack-a-day smokers) but can be as much as $14 a pack in New York City, CNN says.

Yet, research suggests that those who’ve been smoking for years are willing to continue smoking despite price increases, although they might adjust by cutting back.

The Washington Post reported on a Congressional Budget Office study about the impact if the federal tax were raised by just 50 cents. The Post said:

A few years after the hypothetical tax increase took effect, the number of 12- to 17-year-olds who smoked cigarettes would be about 5 percent lower than it would be otherwise, the number of 18-year-old smokers would be 4.5 percent lower, the number of 19- to 39-year-old smokers would be almost 4 percent lower, and the number of smokers age 40 or older would be about 1.5 percent lower.

Of course, the tobacco companies hate talk of a new tax, arguing that it would tie a government program to a revenue source that is bound to decline as fewer people smoke, and would unfairly penalize low-income people, who are more likely to be smokers than higher-income folks. The Campaign for Tobacco-Free Kids disputes those arguments.

What do you think? Would a higher tax on cigarettes finally convince you or smokers in your life to give up the habit? Share your views on our Facebook page.

And if you want to quit — now or if Congress approves a higher tax rate — there’s plenty of free help for that. Use your favorite search engine to find help in your area.

Karen Datko
Karen Datko
A veteran of three decades in the newspaper business, I moved to online writing and editing in 2007, specializing in personal finance. I'm frugal but not cheap, have zero debt and paid ... More


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