Tobacco Pricing

Research

Cigarette price-minimization strategies by U.S. smokers
A new study analyzed strategies used by smokers to circumvent increases to cigarette excise taxes in order to continue smoking. Data from the 2009-2010 National Adult Tobacco Survey were used to identify the prevalence of the following common price-minimization strategies: (1) making cigarette purchases by the carton rather than by the pack; (2) taking advantage of marketing promotions (3) purchasing cigarettes over the Internet; (4) purchasing cigarettes on an Indian reservation; or (5) smoking generic cigarettes. The research showed that 55.4% of adult smokers in the U.S. used at least one of these five price-minimization strategies in the previous year. The average price reduction was $1.27 per pack, and the results varied by state. The results of this study provide evidence that policies that reduce opportunities for smokers to utilize price-minimization strategies are needed. Click here to access the study abstract and full report published in the American Journal of Preventive Medicine.

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Reports

Poll: 70 percent of Connecticut voters support raising the tax on cigarettes (CT)
According to a recent poll, the majority of Connecticut voters support a 95 cent increase to the state’s cigarette excise tax. A tax hike of this size would push 11,000 adult smokers to quit and bring Connecticut’s tax rate in line with neighboring states, such as New York. A statewide telephone poll was conducted by The Mellman Group among 500 registered voters in the state. Seventy percent of the respondents reported that they support the tax increase and more than half (59%) reported that they strongly supported the 95 cent increase. Health advocates have publicized the tax revenues as a windfall for the state’s budget, yet some are doubtful that a bill will be introduced with just weeks left in the state’s legislative session. Click here to read more, or click here for a press release from the Campaign for Tobacco-Free Kids about the poll results.

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State Policy

California mulls $2 tax for cigarettes (CA)
Recent legislation introduced in California would increase the excise tax on cigarettes to $2.87. This increase would provide revenue for healthcare programs in the state as well as reduce cigarette sales. The current excise tax on cigarettes in the state is 87 cents, and an increase is supported by the American Heart Association, American Cancer Society, American Lung Association, and more than a dozen other organizations. This bill has now passed the first two committees in the state Senate. Click here to read more. Click here to track SB 768, which has been sent to the Appropriations Committee.

Minnesota legislature passes tax bill (MN)
Minnesota lawmakers voted in favor of a bill that will raise $2.1 billion for the state of Minnesota by increasing taxes on high-wage earners, smokers, and corporations. Under this legislation, cigarette taxes will be raised to $1.60 per pack and other tobacco product taxes would also increase greatly to achieve parity. The increase in tobacco taxes is estimated to raise $430 million in additional revenue during the next two years. Research shows that cigarette tax increases are effective in deterring young people from smoking and influencing smokers to quit. Click here to read more about this tax increase, or click here for a press release from the Campaign for Tobacco-Free Kids. Read about the anticipated effects of the tax here.

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National Policy

Senators Lautenberg, Durbin, Harkin, and Blumenthal introduce legislation to stop tobacco smuggling, close tobacco tax loopholes, and increase federal tobacco taxes
A group of U.S Senators has come together to create the “Tobacco Tax and Enforcement Reform Act” new legislation that aims to “reduce illegal tobacco trafficking, eliminate tax disparities between different tobacco products, and increase the federal excise tax rate on tobacco products.” The plan includes reforms that would generate revenue for children’s health insurance programs, reduce youth tobacco consumption, and fight against criminals who profit from illegally trading tobacco. Senators Lautenberg (D-NJ), Durbin (D-IL), Harkin (D-IA), and Blumenthal (D-CT) are co-authors of this legislation. Click here to read more. Click here to track S 826, which has been referred to Committee.

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