Tobacco Pricing

Reports

State Cigarette Excise Taxes — United States, 2010–2011
According to a new Morbidity and Mortality Weekly Report (MMWR) from the Centers for Disease Control and Prevention, increasing the price of cigarettes is one of the most effective ways to reduce smoking and prevent youth from starting to smoke. Between 2010 and 2011, eight states increased their cigarette tax and one state decreased their tax, compared to in 2009 when 15 states increased their cigarette taxes. The report concludes that research has demonstrated that increasing cigarette prices reduces the demand for cigarettes which in turn decreases the prevalence of smoking. States can further reduce cigarette use by investing tax revenues in comprehensive tobacco prevention and control programs. Click here to read the report, or click here for a press release from the Campaign for Tobacco-Free Kids which calls upon state leaders to increase tobacco prices, and notes that the states’ failure to raise tobacco taxes is undermining the nation’s progress in reducing tobacco use.

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State Policy

Bill takes aim at smokeless products (HI)
A bill headed to the Hawaiian Senate would increase the state tax on smokeless tobacco products, roll-your-own tobacco and “little cigars” to 70% of the wholesale price of the product, making the tax uniform among all forms of tobacco, including cigarettes. The bill is aimed at decreasing consumption of alternate forms of tobacco that up to this point, have been cheaper to purchase than cigarettes. Public health advocates support the bill, as tobacco users tend to decrease their consumption as tobacco prices increase. Click here to read more and click here to track Senate Bill 2422.

Maryland House committee votes to up tax on some tobacco products (MD)
The Maryland House Ways and Means Committee voted this month to support a 55% tax increase on cigarillos, to increase the tax rate on smokeless tobacco products to 50%, and to keep the tax rate for premium cigars at 15%. The Maryland governor had originally proposed a 70% tax rate for the three tobacco products, which is comparable to the tax rate on cigarettes. Health advocates are pleased with the tax proposals, but would like to see the taxes raised on all three products in order to reduce tobacco use as much as possible. The Senate already approved a slightly larger tax hike for smokeless tobacco and a modest tax increase for premium cigars, and now, a conference committee will reconcile the House and Senate versions of the bill. Although the tax increases could generate millions of dollars in tax revenue, there are currently no plans to earmark any of that money for public health programs. Read more by clicking here.

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Federal Policy

Amendment to highway bill sideswipes Little Tobacco
The U.S. Senate has approved an amendment to a federal highway bill that would reclassify as tobacco manufacturers any tobacco retailers that allow their customers to use “roll your own” (RYO) cigarette machines. The reclassification would make the retailers subject to tighter restrictions and higher taxes. Tobacco retailers and companies that build the machines are concerned about the implications for their businesses; however, major tobacco companies have lobbied for tighter regulation of RYO machines, on the basis that the machines provide smokers with access to extremely cheap cigarettes by enabling smokers and tobacco retailers to avoid paying cigarette taxes and to skirt health laws that impose fire safety requirements for cigarettes. Read more here.

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