Report Links Tobacco Tax Hikes To Declining Smoking Rates

Increases in state tobacco taxes have led to decreases in consumption of cigarettes, with the amount of the reductions directly proportional to the amount of the increases in taxes, according to a USA Today analysis.

According to the analysis, smoking rates in California have decreased by 18% since 1999, when the state tobacco tax increased to 87 cents per pack. The analysis also found that:

Per capita consumption of cigarettes in Connecticut has decreased by 37% since 2002, when the state tobacco tax increased to $1.51 per pack from 50 cents per pack;
Smoking rates in New Jersey have decreased by 35% since 2002, when the state tobacco tax increased to $2.40 per pack from 80 cents per pack; and
Cigarette sales in North Carolina in 2006 decreased by 18% after the state tobacco tax increased to 35 cents per pack from five cents per pack.

By comparison, per capita consumption of cigarettes in South Carolina, which since 1977 has had the lowest state tobacco tax nationwide at seven cents per pack, has decreased by 5% since 2000, the analysis found. Smoking rates decrease by 2.5% to 5% for every 10% increase in the price of cigarettes, according to the Congressional Budget Office.

According to Frank Chaloupka, a University of Illinois economist, passage of a bill under consideration in Congress that would increase the federal tobacco tax to $1 per pack from 39 cents per pack would reduce per capita consumption of cigarettes by 6% nationwide. He said, "I expect a bigger drop than anything we've ever seen before."

The Senate last week passed legislation that would increase the cigarette tax the federal tobacco tax to $1 per pack to help finance an expansion of the State Children's Health Insurance Program.

The House last week passed similar legislation that would increase the federal tobacco tax to 84 cents per pack (Cauchon, USA Today, 8/10). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.