Tobacco Industry
Cigarette Taxes: Fair or Foul
By B2
Apr 6, 2003, 10:28am

With a per cigarette pack tax increase of $1.10 ($11.00 per carton) staring down at adult smokers in California, are California's adult smokers paying an undue amount of tax just because they smoke?

Currently California has an .85 cent per pack tax and with the increase an adult smoker would pay virtually $20.00 per carton tax when they purchase a carton of cigarettes. This would result in roughly 42% of the total cost of a carton goes to taxes. Are there any other products taxed at this level? Not at 42%, the next closest percentage would be retail gas sales.

This tax increase would make cigarettes the most highly taxed retail product sold in California as a percentage. Higher than alcohol, firearms, furs, luxury transportation and more. California would gain a nice chunk of funds to offset the states deficit if people continued to smoke cigarettes after the increase is passed. However, chances are that they would actually net less total tax dollars collected as people would quit smoking due to the tax or you would see smokers going to Nevada or elsewhere to purchase their cigarettes. Nevada is currently at .35 cents per pack tax.

Other states that have proposed or passed high percentage tax increases include:
Pennsylvania from .31 to 1.00 (+.69 per pack)
Michigan from .75 to 1.00 (+.25 per pack)
Illinois from .58 to .80 (+.22 per pack)
New Jersey from .80 to 1.30 (+.50 per pack)
Ohio from .24 to .84 (+.50 per pack)
South Carolina from .07 to .29 (+.22 per pack)
New York City (+1.42 per pack)

I guess the real question is should there be such differences between states as per how much taxation is placed upon a pack of cigarettes. While smokers, like any other kind of consumer, expect to pay tax for their purchases, they may not believe that the tax burden is fair and is in parity with other products such as gas and alcohol.


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