Tobacco tax increase expected to reduce smoking

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how much would the taxes have to increase in order for smokers to quit? :)

WASHINGTON — For the estimated 20% of Americans who smoke cigarettes, the impact of a federal excise tax increase that takes effect Wednesday is already being felt.
Earlier this month the manufacturer of Marlboro, Parliament and Virginia Slims, Philip Morris USA, increased prices by 71 cents a pack, 9 cents more than the federal tax increase. The maker of Camel, Kool and Salem cigarettes, R.J. Reynolds Tobacco, bumped wholesale prices up by 44 cents a pack and reduced discounting.

The revenue from the tax increase, which will be used to expand coverage under the State Children's Health Insurance Program to an additional 4 million low-income children, was signed into law in February.........................

http://www.usatoday.com/news/health/2009-03-27-tobacco-tax_N.htm

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does anyone see the built in problem with this situation? raise tobacco taxes to fund health-care for children. But raising taxes reduces use of the product, thereby reducing taxes collected, leading to a funding shortage for health-care for children.

So the government has decided to tax tobacco so much that people will stop smoking, which has the effect of ending the funding source of SCHIP.

So, once people stop using tobacco, how do we continue to fund health-care for children? I guess we just tax everyone else more?

Only a government could go about screwing people in this complex of a manner.

They are killing the goose that lays the golden egg. If you tax all this stuff enough, there won't be any significant revenue coming in to feed the government maw at all. Tobacco is about 6% of Ohio's total revenue. That would be a huge hit if it disappears. I hope the Puritans and prohibitions come to rue their actions when they see their next property tax bills and other taxes.

[edit] What we definitely will see is a huge avoidance in the form of smuggling and contraband. Another "drug war'" in the making.

Why is it that those who want to NOT discourage smoking always talk about how much revenue is produced by Ohio's tobacco farmers? The last time I checked, tobacco wasn't the only thing farmers in Ohio can grow, and most Ohio farmers choose to farm a different crop. The opponents of anti-tobacco actions never factor in the income farmers would receive from an alternative crop. If you ask most tobacco farmers why they farm tobacco, (and I've heard the interviews) they usually cite how many years their families have farmed tobacco. They don't want to switch crops even though they can.

When I tell people we should "legalize and tax", I sure as heck DON'T mean to tax the item into obscurity. We're not supposed to be using the power to taxation to STOP people from indulging in a legal product or service. The taxation should be reasonable, and is just our reward for being so tolerant, and it's by TOLERANCE that our rights even exist in the first place.

I don't smoke, have never smoked, and will never smoke, but this onerous taxing of smokers is a farce, and a travesty of social justice.

Smokers are about 20% of Ohio. This is just another targeting of an inferior-minority, which requires the complicity of the super-majority.

With the sin tax payers getting thinner, it is getting time to make up for the lost revenue by putting sin taxes on fast food.

Then move on to other legal products that people use. Put heavy taxes on those products. Say a tax on bottled water? How about a tax on red meat? Then potato chips?

Bend over and get ready for it. After all, it's "for the children".

Don't blame me,
I didn't vote for a
socialist.

Toledoans who worked outside the city had no problem voting to renew the 3/4% tax. After all, it didn't apply to them! Now that Carty wants them to pay, it's suddenly an issue. Sin taxes are nothing different. You know there are thousands of non-smokers who had no problem with taxes and smoking bans. Lets see how they feel when their bottled water or red meat gets taxed! A government that can raise taxes or your neighbor can use that neighbor to tax you!

I saw on a news show that in parts of Nevada where prostitution is legal, they are considering a sin tax on prostitution - $5.00 on each prostitute "event". I also heard somewhere about a possible 18 percent tax on sweetened soft drinks on the horizon.

And THIS, from a news article from Canada -
WINNIPEG----------------------------------------------------------------------------------------------------------------------------------------
http://www.montrealgazette.com/news/Mohawks+gangs+tobacco/1437136/story....
The problem here is the abusive tobacco tax.Black market or smuggled tobacco use would be sharply reduced or eliminated if the tobacco tax was fair,say $1 per package.The fact that illegal tobacco use keeps hitting new record highs is no great surprise.At least it shouldn't be as historically smuggling involving any commodity has always increased as the tax has increased.This smuggling can even occur between nations that are at war with each other.A way will always be found.There are also the ever increasing costs of combating illegal tobacco which,with the increasing amount of revenue not collected,obviously should make any tax increase especially abusive,punitive ones matters of great concern to any government/politician considering such action.I,or many people I would think,would not be surprised if the costs of collecting the tobacco tax do not equal,or at least substantially amount to,the actual revenue collected.

But governments,rather stupidly,continue to raise the tobacco tax again and again,hoping to increase their tobacco profit.They won't.What they will do is "donate" even more money to terrorist and other criminal groups that use this tax abuse to their advantage.We are already losing $2.4 billion each year (nationally) to these groups and their market is expanding.Clearly a major tobacco tax cut is in order to curtail illegal tobacco.If this was done the government might actually collect most of their projected tobacco profits.Apparently they haven't learned anything,especially from the 1990s.Most governments raised their tobacco taxes substantially.Illegal tobacco use rose accordingly,as did the smoking rate in the 15-19 and 20-24 year old age groups in particularly.Later some governments,notably Ontario and Quebec,lowered their tobacco taxes and there was a reduction in illegal tobacco use and the smoking rate then resumed its normal decline.All this has changed again as this latest round of what could best be termed "smoker bashing" began.The tobacco tax increases and smoking bans have caused new record levels of illegal tobacco use and,at least,a stagnation in the normal decline of the smoking rate.Actually so much illegal tobacco use is occurring that they have no idea of what the smoking rate actually is anymore except that it is almost certainly increasing.(see here-this is about as accurate as any and more accurate than many claims)
http://www.hc-sc.gc.ca/hl-vs/tobac-tabac/research-recherche/stat/ctums-e...

Some will try to claim that high tobacco taxes lead to lower smoking rates or that the tobacco tax is used to cover smoking related health care costs.Both claims are false.

There has never been any direct correlation between tobacco taxes and the smoking rate. Historically, far greater declines in the smoking rate occurred at much lower tobacco tax rates. Currently,as I've said,despite record high taxation and the advent of smoking bans,the decline in the smoking rate has pretty well ceased both here and the U.S. When smuggling is factored in,the smoking rate is probably increasing.As you may know,the U.S. historically has had low tobacco taxes,around 30 to 35 cents per package,depending on the state.(some are a little higher) Their smoking rate is about the same as ours.So much for higher taxes making any difference.

As for the supposed health care costs.First of all,it is nonsmokers,when compared to smokers,that are the greater cost to health care.See these;
http://content.nejm.org/cgi/content/abstract/337/15/1052

http://www.econ.canterbury.ac.nz/personal_pages/eric_crampton/NZMJ.pdf

A smoker's health care cost would be covered with about a 35 cent per pack tax.As this is a U.S. figure,our tax should be lower.Currently the tax from just 2 cigarettes would more than cover the supposed tobacco health care costs.The tax from the other legally purchased 23 is sheer profit.Since anyone profiting from tobacco is vilified,so too should be governments and,come to think of it,so called tobacco control.

I should also mention a couple of things.While there are actual substantial revenue losses involved here,(real declines in revenue) governments etc. have a penchant for including "projected" revenue in the loss column,especially when it suits them.This money is not actually lost,it merely wasn't gained.They are still making a huge profit."Projected" revenue is also often used when constructing "balanced" budgets for example.In this case they should know that tobacco tax increases will result in less revenue being collected.Also there are other factors that may also be jointly responsible for increasing the smoking rate.For instance,historically so called tobacco control measures usually result in increases,or a slowing of the decline,in the smoking rate.This can occur with anything,especially if the "control" measure is drastic.I would think that everyone would remember what happened with alcohol when they tried to ban it.It is far more productive to educate people,using credible reason,than to legislate compliance using spurious reason as an excuse.The group being attacked will rebel.Come to think of it,this is often what starts civil wars or revolutions.

Yes, I can see the mistake in raising taxes on tobacco. I live in a State the does not have a State law against smoking, nor are cities allowed to pass laws that are more prohibitive than any State law. In spite of this clear violation of the rights of non-smokers to control the lives of smokers, we have a huge selection of restaurants where smoking is prohibited. Other places have smoking and non-smoking sections. Still others are smoke 'em if you got 'em places.

So far, I'm managing to get along fine, although I must admit that the very thought of people being free to do as they see fit with their own lives makes me sleep better at night.

Cigarette smuggling into Canada used to be a big business, but the cost of fuel is prohibitive. By the time I fuel up the tanker and bust the gate at International Falls, I'm pretty much running a fine line between the red and the black, plus it's colder than a banker's heart up there, and that's in July. Hardly makes it worth while anymore. And you can pretty much forget that Lake St. Claire run, because what with nine-eleven and the patriot act the stupid border guards have a whole bunch of new toys, satellite connections, night vision gear, computers all over the place, and they'll shoot at you as soon as not.

And then, even if you do get your freight into Canada they'll try to pay you off in US Dollars and the beating you'll take trying to exchange the currency when you get back home is going to cut your profit to the bone. Shoot, if you figure out the hourly wage, I could make as much working at McDonald's.

Nosir, it just ain't right.

Mad Jack
Mad Jack's Shack

http://www.smokin4free.com/

Carton of Marlboro Red MANUFACTURED IN EUROPE = $14.80

From the website:

Smokin4Free.com - store located out of the USA.
Smokin4Free.com provides the customers:
- the lowest price (much cheaper than at American cigarettes stores)
- the highest personal safety
- it is legal to order cigarettes at international online stores (legal to order cigarettes by international mail in a small quantity for personal use.)
- delivery time is between 16 days and 4 weeks.

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Once again, the US Government has shot itself in the foot. It is cheaper to buy a foreign made product and have it imported into the USA than it is to buy an American made product.

Don't blame me,
I didn't vote for a
socialist.

Wow! This is where American consumers will be going when government tries to squeeze them financially and enforce social engineering. The law will mean nothing. It just breeds contempt and avoidance... just like Prohibition days.

From wikipedia -
At the end of Prohibition, some supporters openly admitted its failure. A quote from a letter, written in 1932 by wealthy industrialist John D. Rockefeller, Jr., states:

When Prohibition was introduced, I hoped that it would be widely supported by public opinion and the day would soon come when the evil effects of alcohol would be recognized. I have slowly and reluctantly come to believe that this has not been the result. Instead, drinking has generally increased; the speakeasy has replaced the saloon; a vast army of lawbreakers has appeared; many of our best citizens have openly ignored Prohibition; respect for the law has been greatly lessened; and crime has increased to a level never seen before.[14]

Some historians have commented that the alcohol industry accepted stronger regulation of alcohol in the decades after repeal, as a way to reduce the chance that Prohibition would return.
********************************************
And yet, they seem to expect a different result with smoking bans. (Isn't that the definition of insanity? To expect a different result when you repeat a process or behavior?)
On the simplest level, what happens when you tell teens not to do something because it's bad and/or dangerous? Just makes it more attractive to them usually..
The smoking bans were passed because people believed the Surgeon General, EPA, and the lies behind the 'studies" (and all have since been thrown out in court for that reason - they were lies.). They raise taxes over & over on tobacco to pay for kids health care (which seems wrong, especially when my kids never would have benefited from SCHIPS) - but lied & said it was for the sake of 'health', and they expected people to stop smoking. In reality, it had more to do I think with those who just couldn't fathom the idea of choosing where to enter or not, on their own & needed govt intervention to 'protect them'. It's all been lies, and the cost to small business has been horrific.
CNN has been running programs on the drug trafficing in Mexico. One of those whose identity was hidden & close to the killings & crime, said that as long as the USA demands the illegal drugs, there will be drug trafficing & crime in Mexico & the borders. Wonder what would happen if they legalized pot & took the profit away? Of course you'd still have the heroin, crack, etc to contend with - but alcohol is worse I think, than pot. But the govt keeps making substances illegal & crime keeps climbing - history repeats itself. I just read where Phoenex, Arizona has the highest kidnapping rate in the country, due to the illegal drug trade in Mexico. Daily be-headings in Mexico, won't be long before that crime wave filters across this country. I would think that our govt has more to worry about than smoking tobacco.

My favorite smoke shop sold out quite quickly of its rolling tobacco. The price on cigarette tobacco is going to double.

With a few exceptions, who rolls their own cigarettes? The poor. It's cheaper to roll your own than it is to buy pre-rolled by the pack.

Tax on cigars is going up $.50 a stick. This is also what is known as a "floor tax" meaning that retailers will have to either eat the tax on existing cost or pay the labor to reprice their stock.

That same $.50 goes on the King Edward and the $30 Perdomo. So who gets hit harder? The poor. Someone who pays $30 for his cigar isn't going to notice the price hike. Someone desperate enough to smoke a King Edward is going to notice it.

I'm waiting to hear from Pink Slip, that great defender of liberal censorship, government confiscation, and command economies can justify this. Or perhaps it's even too much for him to take.

Don't despair. You, as will many other Americans, are going to avoid the tax and stick it to the Man.
http://www.eurocheapcigarettes.com/original-cuban-cigars/

Screw the Feds!

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