The cigarette tax is the most regressive form of taxation out there, even worse than a flat rate tax.
The Massachusetts House passed a bill with a 93-52 vote to increase the cost of cigarettes by $1 per pack. According to the Boston Herald, the increase would generate $174 million in new taxes.
As of January 1, 2008, according to the Federation of Tax Administrators (taxadmin.org), Massachusetts currently ranks 15th in nation on cigarette taxes, with a $1.51 of state taxes on cigarettes. The highest in the nation is New Jersey, which $257.50 in taxes. The lowest state in the Union is Missouri, which just charges 17¢ per pack. If the Massachusetts cigarette tax goes up $1, the $2.51 of taxes will be around the third highest in the nation.
As for the bordering states, on January 1, 2008, the cigarette tax in Vermont was $1.70 per pack (11th), $1.08 in New Hampshire (24th), $2.46 in Rhode Island (2nd) and $2.00 per pack in Connecticut (4th). It is not known whether the expected revenue projections included the fact that we will lose many purchasers of tobacco products to New Hampshire where the cigarette tax will be $1.43 per pack lower, as well as purchasers from Connecticut or Rhode Island where there will no longer be a significant tax disparity. On January 1, 1008, New York had a $1.50 taxes rate on cigarettes, but it was raised to $2.75 in June, making it the highest in the nation. Of course, on state Indian reservations in New York there are no cigarette taxes producing whopping savings for consumers.
There is little denying that cigarette smoking is just about the most harmful thing you can do to your body, save for taking up using crack cocaine for a hobby or jumping off a cliff without a parachute. The problem is that it is powerfully addictive, and those that smoke may be powerless to quit.
One justification for the tax is that cigarette smokers overly taxes the health care system. But most of the studies only consider cost imposed from dying of cigarette related diseases. Since everybody dies, it by no means is certain whether that the cost of dying by cancer is actually more expensive than the cost imposed by the type of death which would have occurred later in life but for the patient’s smoking. Moreover, there are costs associated with living—there are routine health care costs, dental cost, and cost for things such as broken hips. There are also the costs associated with providing housing for an elderly person who has not died, as well as exorbitant nursing home costs that often must be picked up by the state. Finally, when people die early, there is the savings on Social Security and Medicare. Obviously, I am not advocating not imposing a cigarette tax so that people would die off early so we would save money; in fact that would be demented. However, the argument that there is somehow a net savings when people live longer and die of non-cigarette related reasons may be specious.
The more credible argument for increasing the cost of cigarettes is that it may reduce the number of smokers. One problem with this argument is that it does not account for the number of people that take up rolling their own cigarettes and who often do not use filters. Another is that monies that were promised to be spent on fighting smoking almost never end up being used as promised and the taxes just end up back in the general tax revenues, as has happened in Massachusetts before.
Still, there are some people that decide that they cannot afford to smoke anymore, and actually do cut back or quit altogether. But the question is how many? According to the Birmingham News, when Alabama raised its cigarette taxes in 2004 from 16.5 cents per pack to a still low of 42.5 cents, there was no reduction in the percentage of people that smoked. According to a 2001 study by researchers at the Johns Hopkins Bloomberg School of Public Health, “Laws limiting vending machine access had a statistically significant deterrent effect among youth who smoked, but cigarette taxes did not.” The problem is that when you start smoking, you do not yet have a one pack a day habit making the monetary deterrent minimal, and by the time you acquire such an addiction, you are so addicted you just pay the excess taxes to feed your habit.
One thing is for sure—the cigarette tax is the most regressive form of taxation out there, far worse than a flat rate tax. The $916 a year of Massachusetts state taxes for those who have a pack a day habit constitutes 3.66% of income if you make $25,000 per year, but just .916% of income if you make $100,000 per year. By way of comparison, the state income tax is currently a flat rate of 5.3%
RDelGalloIII@aol.com
http://www.berkshirefatherhood.com/
Read more articles by Rinaldo Del Gallo III
"…there are costs associated with living… Finally, when people die early, there is the savings on Social Security and Medicare."
Hey, Mr. Del Gallo: If you cut off your legs, you'll never get flat feet.
Comment by sedonaman | July 5, 2008
Well written and well researched article. I am not a smoker and am glad of some of the changes made (like not being stuck in a smoke filled office), but I am not one of those who, Nazi-like, want to dictate other people's choices. Taxing smokers is about revenue, the rest is smoke screen.
Comment by Bob Stapler | July 5, 2008
Bob Stapler:
Why do these discussions always seem to become Manichaean – either you are for unrestricted smoking, or you are “a Nazi wanting to dictate other people's choices”? There is never a third way of looking at it. As a militant non-smoker, I’ve never felt it was about “dictating other people's choices.” I just wanted to breath relatively clean air. What others chose was not my concern unless they were causing me unreasonable discomfort. Since breathing is a necessary and natural activity whereas smoking is only a self-induced need, I claim my right to breath clean air trumps someone else’s “right” to foul the air without consideration. As other non-smokers, I had to be considerate and endure about 40 years of smoke anyplace a smoker chose to light up where I couldn’t leave. It took about 20 years for the table to turn, and now I’m reasonably smoke-free. However, I do think any more initiatives that further restrict smoking might cause a backlash, and we non-smokers would end up less better off than we are now.
Comment by sedonaman | July 5, 2008
Sedona,
I'm with you, but this article hasn’t proposed we reverse smoke free work environments. It discusses only the way government has clouded and is still exploiting the issue (well after we won) to unfairly tax. The idea draconian government measures can or should be used to control personal behaviors having minimal effect on others is wrong. It is wrong to inflate the effects of second-hand smoke to do this. If you object to others befouling the air we breath (and I do), then object strenuously on that basis. If a co-worker decides to bring his dead cat to work and leaves it rotting next to his desk so that someone (anyone) nearby cannot work without vomiting, she has a perfect right to complain and make him get rid of it. This argument should have been sufficient, but we were outnumbered, out-voted, and even our bosses sympathized as fellow smokers.
When fanatical anti-smokers did not get their way on that basis, they decided it was fair to claim second-hand smoke not only noxious but highly toxic. They did this even before having proof, and much of the proof we have now is of questionable quality. They compromised principle further by using lawyers to go after tobacco companies in lieu of smokers. When this still did not have the desired effect, they turned to government to intervene ‘on behalf of children’ (always a sure sign of fraud) and government complied by backing hyped claims, abetting court determinations, mandating smoke-free zones and workplaces, schools, colleges, restaurants, theaters, food stores, parks, &c. In the latest round of criminalizations we have extended the restriction even to bars, pool halls, and adult entertainments inappropriate to children (a nice quiet pool-hall [landmark] near me closed shortly after this ban went into effect because most of the clientele were smokers; now an abandoned property attracting bums and delinquents); and are, in many places, dictating parents can no longer smoke near their own kids or in their kid’s habitat (home, car, &c) even when the kids are not around. So, where before, the claim was we non-smokers were chased out with no place we could patronize, it is now the smokers who are chased from every venue and business suffers that no stone remain unturned. For awhile, government resists these obsessions but at some point it always caves to populism. Thereafter, it finds no cause is without its silver lining (i.e., can be taxed and increases their power). At some point, it ceases being about balancing rights as between conflicting groups; it becomes a need to dictate.
Like you, I put up with smoke fouling my breathing space (including my father's and brothers') without a great deal of complaint. When I did, I was ignored and told I was exaggerating the ill effects on me; which I resented. I never allowed others to smoke in my own home, but compromised at work and public because that’s just how things were and the only way I’d ever known. The anti-smoking lobby took the easy route rather than principled to win. It would have taken longer and we’d have had to compromise more, but the result would be solid. I prefer things as they are now, not having to smell smoke everywhere I go and even bringing it home with me: saturating my hair, skin and clothes. Even so, I think we played dirty getting here, and it is bound to boomerang. If it does, we will never again be able to make the case inflicting smoke on others is wrong for no other reason than it stinks or nauseates.
Comment by Bob Stapler | July 6, 2008
New York state has the highest cigarette tax in the nation at $2.75 per pack.
Comment by Jd | July 6, 2008
That tax is not so bad. A packet in the Netherlands costs 4 Euros (around $6). A packet in the UK (from the last time I was there) costs 5 GBP (around $10).
They just go up and up! A nice simple way to raise taxes on those with no voice to complain. Next will be a tax on fatty foods (once they figure out how).
Comment by Leigh | July 7, 2008
Leigh,
By your body mass index (BMI - http://en.wikipedia.org/wiki/Body_mass_index#BMI-for-age ), of course. Subtract 20 from your BMI, multiply the result by $1,000, and add this amount to your annual income tax. We can also add a surtax onto all foods, prorated by a suitable 'fat factor'. In fact the possibilities and variations are endless, making this tax ideal for creating nifty political divisions with which to set one American against another!
Comment by Bob Stapler | July 7, 2008
Mr del Gallo wrote:
Except, of course, that the cigarette tax is, in the end, entirely voluntary. If you don't want to pay the cigarette tax, then don't buy cigarettes!
Comment by Dana Pico | July 13, 2008
Rinaldo:
You makes some good points.
Taxing cigarettes is quite regressive, as are the other sin taxes such as alchoholic spirits and the lottery, which is a tax by another name, as well as gasoline taxes.
As opposed to other non-food sales taxes where wealthier people spend more and pay more, poorer people tend to smoke, drink, play the lottery, and drive their cars equal to their wealthier taxpayers. The lottery, in particular, I find to appeal to the poor who see it as their way out and play it disproportionally and the government has no business encouraging this behaviour.
I also agree with you that smoking saves the government money in that smokers die younger and use less Nursing Home Care and social security. Funny, the tobacco industry did not follow this legal strategy.
What I disagree with you is your statement that increased taxation does not change smoking rates. I think you have picked two outlier citations with the concensus view being the contrary. Check this citation:
http://www.usatoday.com/news/health/2007-08-09-1Alede_N.htm
Also, anecdotally, as a physician who has spent the last 20 years encouraging smokers to quit, I can attest that price is definitely a factor in people quitting, and I routinely find it as effective in persuasion as the fact that nicotine causes decreased errections and wrinkles. I don't usually mention that it causes weight loss too.
Whether the effect of higher taxes on quit rates overrides the negatives of a regressive tax is debatable but I do think it leads to higher quit rates.
Comment by yonkel | July 13, 2008
Without all the taxes, how much would a pack of cigs cost, anyway? Not much, eh? I'm against all tax anyway, so…
I'm a smoker but I enjoy the smoke-free workplace. I do disagree with imposing a ban on ALL restaurants, theatres, etc etc. Why is it so abhorrent to let the owners of such establishments dictate for themselves what kind of place it will be, smoking or non-smoking? Why does EVERY SINGLE RESTAURANT, THEATRE, BAR (whatever) have to be non-smoking? I think that is where they've gone overboard.
As for the cleaner air - last I checked, the millions of cars are still burning fossil fuels. We still get smog advisories.
Comment by AMAI | July 21, 2008
AMAI:
"Why does EVERY SINGLE RESTAURANT, THEATRE, BAR (whatever) have to be non-smoking?"
I used to work in a theatre in the early '60s (before any smoking bans), and smoking inside was prohibited by the FIRE DEPARTMENT.
Comment by sedonaman | July 21, 2008
Fine. But all restaurants, bars? Why does everyone have to be forced on this issue?
Comment by AMAI | July 24, 2008
AMAI:
"Why does everyone have to be forced on this issue?"
I'll give you the answer that smokers gave me when I objected to their lighting up: "You can leave."
Comment by sedonaman | July 25, 2008
If we have to pay for their diseases of cancer etc it is more than fair…………
Comment by diana | July 31, 2008
Second hand smoke causes diseases,,,go outside if you want to smoke. Don't harm other people.
Comment by diana | July 31, 2008