Tobacco Pricing

Research

Cigarette taxes linked to binge drinking
Results of a new study by the Stanford Prevention Research Center suggest that increases in cigarette taxes are associated with modest to moderate reductions in alcohol consumption among smokers. Researchers examined data on 21,473 alcohol consumers from the National Epidemiological Survey on Alcohol and Related Conditions (NESARC) to see if an association existed between cigarette taxes and alcohol consumption. Findings show that increases in cigarette taxes were associated with modest reductions in frequency of binge drinking and quantity of alcohol consumption among smokers. The inverse association was stronger among hazardous drinkers, young adult smokers, and low-income smokers. The inverse relationship between cigarette taxes and drinking did not exist for nonsmokers. Findings from the study contribute to the growing body of evidence on the public health benefits of cigarette taxation and health behavior. Click here to read more, or click here to view the study abstract in Alcoholism: Clinical and Experimental Research.

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State Policy

Mass. tax increasing for gas, cigarettes; national average of state tobacco taxes increases to $1.53 per pack (MA)
As of August 1, the cigarette tax rate in Massachusetts increased to $3.51 per pack, a $1.00 per pack increase. Massachusetts now has the second highest cigarette tax rate in the country, following New York. The state has also increased the tax on other tobacco products, including a smokeless tobacco rate of 210% wholesale price, and a smoking tobacco and cigar tax of 40% wholesale price. Currently, 30 states have cigarette tax rates of $1.00 per pack or higher. Click here to read a statement about the recent tobacco tax increase from the American Cancer Society Cancer Action Network (ACS-CAN), or click here for related information from the Campaign for Tobacco-Free Kids.

N.H. cigarette tax going up dime (NH)
In New Hampshire, the taxes on cigarettes and other tobacco products have increased to $1.78 per pack and 65.03% of wholesale price, respectively. The increases will restore the state’s cigarette and other tobacco product tax rates to levels that were in effect prior to the tax rates being cut in 2011. The rate decreases passed in 2011 had a contingency clause stating that the previous tax rates would be restored if the tobacco tax revenue did not increase by July 15, 2013. The New Hampshire tax increase and a related Massachusetts tax increase bring the average state excise tax to $1.53 per pack. Click here to read more about these recent tobacco tax increases, or for related information from the Campaign for Tobacco-Free Kids about state cigarette taxes, click here.

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National Policy

Poll: Strong support for early childhood education funded by cigarette tax
The results of a national poll released by the First Five Years Fund (FFYF) show strong support for a proposed federal cigarette excise tax increase that would raise an estimated $78 billion over the next decade to pay for preschool programs for children. Poll results show 70% of American voters support using the $0.94 federal cigarette tax increase to fund and expand early childhood education programs. The majority of Republicans, Independents, and Democrats support the plan at 60%, 64%, and 84% of voters, respectively. The Campaign for Tobacco-Free Kids stated the cigarette tax would effectively prompt 2.6 million adult smokers to quit, prevent 1.7 million kids from becoming addicted adult smokers, and save $42 billion in future healthcare costs from reductions in smoking. The cigarette tax was included among other tax increases in President Obama’s proposed budget plan. To view the poll results, click here, or click here to read a summary of the poll findings in a blog post from the Campaign for Tobacco-Free Kids. Click here to read more about the tobacco tax, which was proposed earlier this year.

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International

Australian smoking rate to beat U.S.'s on tax (Australia)
The Australian Prime Minister is proposing to increase tobacco excise taxes as a way to raise an estimated A$5.3 billion, return the budget to surplus by the 2016-2017 fiscal year, and prevent cancer. The tobacco tax will be a 12.5% increase, moving the price of a pack of cigarettes from A$20.00 to A$25.00 and the price of a single cigarette to about A$1.00. Currently, tobacco-related diseases cost Australia more than A$31 billion annually. Click here to read more. In response to the excise tax proposal in Australia, Bloomberg.com produced a chart showing the percentage of adults who smoke in the world’s six largest economies. Among the six largest countries, France was the only country where the smoking rate rose from 2001 to 2012, while Japan had the most significant decline from 32.7% to 21.1%.  Among the six nations, the U.S. had the lowest smoking rate at 18%.  Click here to view the chart of countries’ smoking rates over time.

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