Excise Taxes

Research

Enacting tobacco taxes by direct popular vote in the United States: Lessons from 20 years of experience
Because of the tobacco industry’s influence on legislatures, the issue of raising tobacco taxes has been put to a popular vote in numerous states. Based on a review of case studies of campaigns for state tobacco tax increases, researchers have identified aspects of campaigns that tend to be most effective. The study concluded that tobacco tax increases with tax revenues devoted to tobacco control are more likely to pass than taxes used to fund medical services. Click here for the abstract of the study, which was published in Tobacco Control.

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State

Anti-smoking groups ramp up tobacco tax drive (CA)
As California lawmakers battled over the state budget this summer, anti-smoking groups such as the American Cancer Society have campaigned to nearly triple California’s current tax on cigarettes and other tobacco products. The tax increase would save the state over $8 billion in healthcare costs related to smoking and help reduce teen smoking rates. Additionally, California’s tax on tobacco products has not increased in over 10 years and the state currently has one of the nation’s lowest cigarette taxes. Click here for more details. A recent poll indicated that more than 70% of Californians support a $1.50 per pack cigarette tax increase to solve the budget. Read more about the poll here. Update: The California Senate approved a budget plan that does not include a cigarette tax increase. Read more about the budget here.

North Carolina should increase cigarette tax by at least 50 cents to save lives and raise revenue (NC)
A July press release from the Campaign for Tobacco-Free Kids calls for a cigarette tax hike of at least 50 cents in North Carolina. The press release notes that a cigarette tax is not only popular among voters, but it would also help remedy the state’s $4 billion budget deficit. Through July, state legislators have continued to negotiate the details of   the state budget, which included a cigarette tax increase. Governor Bev Perdue initially called for a 50-cent increase, but the figure was trimmed during budget negotiations. Click here to read the statement from the Campaign for Tobacco-Free Kids. Because of the governor’s distaste for the income tax and sales tax hikes in the budget, legislators are continuing to revise the budget. Read more here.
                         
Tobacco lawsuit freezes $258 million in state budget for human-services programs (OH)
State legislators passed a two-year budget that will reroute $258 million from the state Tobacco Use Prevention and Control Foundation to human services programs. However, the money is frozen until a lawsuit by the Foundation to recover the money is settled. Health and human services advocates find this concerning because the money is to fund several human services programs, including health care programs, Medicaid, and child and adult protective services. In a preliminary ruling earlier this year, a judge ruled that the anti-tobacco group had a "substantial likelihood of success" in keeping the money because the funds were set aside specifically for tobacco cessation and prevention under Ohio law. The state tobacco control money is paid by tobacco companies under the Master Settlement Agreement. Read more here.

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International

Blowing smoke (China)
A marginal tax increase on tobacco products that went into effect last month has had little impact on retail pricing or tobacco sales. Critics state that the tax increase is not enough to encourage people to stop smoking or using tobacco products. The China Association on Tobacco Control (CATC), an academic and nonprofit group, has recommended that the government increase the cigarette tax by a large margin in order to encourage smokers to quit and deter young people, who are more price-sensitive, from starting to smoke. However, the director of the Research Institute for Fiscal Science in the Ministry of Finance believes that the existing tax increase will ultimately affect consumers. Click here to read more.

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