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Cigarette Tax Clouds Boosts Among States

Harry Guerrilla

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Cigarette Tax Clouds Boosts Among States - WSJ.com

The hefty increase in the federal cigarette tax to help fund a children's health-insurance program has buoyed tobacco foes, who say it will breathe new life into efforts to curb smoking. But last week's move by Washington could also complicate efforts around the U.S. to boost state cigarette taxes.

Officials in at least 16 states -- including Mississippi, Georgia and Kentucky -- are weighing proposals for significant cigarette-tax increases to fill gaping budget holes or fund programs, calling in some cases for levies more than four times as high as current amounts. The sharply increased federal levy could alter their calculus, because the higher cigarette prices are likely to decrease sales, eroding projected tax revenue.


A 10% increase in the price of a pack reduces consumption by about 4%, said Frank J. Chaloupka, an economist and tobacco-tax expert at the University of Illinois at Chicago. Although higher prices reduce the number of cigarettes smoked, tobacco-tax revenue has still risen in nearly every state that imposed significant tax increases, he said. The new federal tax could motivate states to raise their own taxes to help offset the expected drop in cigarette sales, Mr. Chaloupka said.

But back-to-back federal and state tax increases could significantly drive down revenue from sales, as well as foster counterfeit trade, warns David Sutton, a spokesman for Altria Group Inc., the country's largest cigarette maker.

The National Association of Tobacco Outlets estimates that the federal tax increase, which applies to several forms of tobacco, will lead to the loss of 117,000 of the industry's 1.2 million jobs, a devastating blow especially in a bad economy, said Executive Director Tom Briant. "There are a lot of hardworking people who are going to lose their stores, and all their employees will lose their jobs," he said.

How do you feel about funding SCHIP, since most likely the revenues from cigarette taxes will not cover the costs of the program?
 
The article is insinuating that because states are also raising taxes on cigarettes that it will curb use, which reduces funds for SCHIP.

Who will they collect from when there are not enough taxes from cigarettes to fund the program?


If it curbs the use then we will find another harmful product which to tax more.

We will do that until that harmful product's usage is curbed and the taxes on cigarettes will be slowly lowered.

Then we re-tax the cigarettes, curb the use once again. Wash and repeat.
 
If it curbs the use then we will find another harmful product which to tax more.

We will do that until that harmful product's usage is curbed and the taxes on cigarettes will be slowly lowered.

Then we re-tax the cigarettes, curb the use once again. Wash and repeat.

My prediction for the future will be that those taxes alone will not support the program.

The general fund will have to make up the revenue stream and a whole lot of people who see a cheap source for insurance, that already have a commercial plan, will hop on board their state SCHIP plan.
 
Legalise Class A drugs, then Tax them.
Increase Taxes on Alcohol.
 
I think it is total B.S.! Smokers get screwed once again:(
 
Some of my buddys that smoke are sick and tired of the HUGE taxes put on the butts and now R.I. is putting another $1.00 tax per pack.
Oh and the tax money going for the 'kids' is the same bull**** that R.I. and Mass. have always used but the tax goes into the 'general fund' where it gets lost.
Same old same old bull****, for the kids, for the seniors.
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A pack of butts can be bought on the web from the Indians for as low as $12.00 a carton and tobaco for a carton of butts and a carton of tubes can be bought in the local Mom and Pops stores for about $13.00 a carton.
The butt making machines can be bought theres also from $5.00 to $27.00.
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I just got back from the computer show in Rockingham, New Hamphire and I brought 50 cartons back to the guys at $30.00 a carton. There is no sales tax in New Hamphire. Even at that thats a $3.00 savings per pack.
 
I've never understood why people continue to propose .such massive amounts of funding for smoking cessation programs. Instead of spending $75m, why not just jack up the taxes on them and make $75m while having the same deterrent effect?
 
I think it is total B.S.! Smokers get screwed once again:(

Stop screwing the rest of us with your hundreds of billions of dollars of health care costs.
 
I've never understood why people continue to propose .such massive amounts of funding for smoking cessation programs. Instead of spending $75m, why not just jack up the taxes on them and make $75m while having the same deterrent effect?

cessation programs are pretty stupid.

All the cessation drugs, and alternatives are nicotine based as well. It's like trying to cure a cocaine addict by giving him a 1/20th of his usual dosage.

Addiction is an obsessive mentality. Has to be up to the individual.
 
Who will they collect from when there are not enough taxes from cigarettes to fund the program?

They just do like the UK and dip into general tax funds while claiming that the cigarette tax and "donations" make up a majority of the costs.

Just think, it will be paying for that octoplet birthing single divorced unempolyed mom's 13 kids.
 
Stop screwing the rest of us with your hundreds of billions of dollars of health care costs.

Do you feel the same way about people who drink too much, eat too much and people that do not exercise?
 
Cigarette Tax Clouds Boosts Among States - WSJ.com

How do you feel about funding SCHIP, since most likely the revenues from cigarette taxes will not cover the costs of the program?

I would have no problem with the states taxing whatever they want; i mean i can easily move.

SCHIP is porks belly. How about they subsidize medical school for the top 1% ACT/SAT with half the funds, and the other half build research facilities to be leased to the private sector for 49-99 years?
 
Do you feel the same way about people who drink too much, eat too much and people that do not exercise?

Of course.

It just so happens that your foible is particularly discrete and directly correlated to health problems, thus making it susceptible to punitive taxation.

That being said, I've got no problem with increases in alcohol taxes, even thought it would cost me more money. I recognize that alcohol causes increased societal/economic costs in terms of healthcare, and am willing to pay my share of that.

Food/exercise is a lot more difficult administratively, but I'm in favor of reducing benefits for people who suffer from ailments related to obesity if need be.
 
I would have no problem with the states taxing whatever they want; i mean i can easily move.

SCHIP is porks belly. How about they subsidize medical school for the top 1% ACT/SAT with half the funds, and the other half build research facilities to be leased to the private sector for 49-99 years?
Holding your hand out are you?
 
What does this contribute to the thread?
It describes the thoughtless response given by the above person. It's okay to tax something that I don't use, without consideration of the senselessness of the tax itself or the unintended consequences of supporting taxes offhandedly.
 
It describes the thoughtless response given by the above person. It's okay to tax something that I don't use, without consideration of the senselessness of the tax itself or the unintended consequences of supporting taxes offhandedly.

I smoke cigarettes.

YOU FAIL.
 
It describes the thoughtless response given by the above person. It's okay to tax something that I don't use, without consideration of the senselessness of the tax itself or the unintended consequences of supporting taxes offhandedly.

So say that, instead of throwing out a rude one-liner that brings nothing to the table.
 
Holding your hand out are you?

Not really... Although more hospitals being built does sound promising. My comment was in regards to the demand of quality doctors and research MD's.
 
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