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Smokers face a hit as tobacco taxes spike - Will this help persuade smokers to quit?

Posted by on Mar. 29, 2009 at 11:42 AM
  • 31 Replies

 Smokers face a hit as tobacco taxes spike

AP

WASHINGTON - However they satisfy their nicotine cravings, tobacco users are facing a big hit as the single largest federal tobacco tax increase ever takes effect Wednesday.

Tobacco companies and public health advocates, longtime foes in the nicotine battles, are trying to turn the situation to their advantage. The major cigarette makers raised prices a couple of weeks ago, partly to offset any drop in profits once the per-pack tax climbs from 39 cents to $1.01.

Medical groups see a tax increase right in the middle of a recession as a great incentive to help persuade smokers to quit.

Tobacco taxes are soaring to finance a major expansion of health insurance for children. President Barack Obama signed that health initiative soon after taking office.

Other tobacco products, from cigars to pipes and smokeless, will see similarly large tax increases, too. For example, the tax on chewing tobacco will go up from 19.5 cents per pound to 50 cents. The total expected to be raised over the 4 1/2 year-long health insurance expansion is nearly $33 billion.

Smokers are mulling their options.

Standing outside an office building in downtown Washington last week, 29-year-old Sam Sarkhosh puffed on a Marlboro Light. His 8-year-old daughter has been pleading with him to quit, he explained, and he has set a goal to give up smoking by his 30th birthday.

"I'm trying to quit smoking, and it could help," said Sarkhosh, an information systems specialist. "I don't think it will stop me from buying cigarettes every now and then, but definitely not as often." A friend who smokes Camels went out and bought four cartons in advance, he said.

The tax increase is only the first move in a recharged anti-smoking campaign. Congress also is considering legislation to empower the Food and Drug Administration to regulate tobacco. That could lead to reformulated cigarettes. Obama, who has agonized over his own cigarette habit, said he would sign such a bill.

Prospects for reducing the harm from smoking are better than they have been in years, said Dr. Timothy Gardner, president of the American Heart Association. The tax increase "is a terrific public health move by the federal government," he said. "Every time that the tax on tobacco goes up, the use of cigarettes goes down."

About one in five adults in the United States smokes cigarettes. That's a gradually dwindling share, though it isn't shrinking fast enough for public health advocates.

The Centers for Disease Control and Prevention says cigarette smoking results in an estimated 443,000 premature deaths each year, and costs the economy $193 billion in health care expenses and lost time from work. Smoking is a major contributor to heart disease, cancer and lung disease.

Public health officials are urging individual doctors and staff at telephone "quit lines" in every state to make the most of the tax increase by reaching out to smokers. But it's unclear how deeply the tax will cut into tobacco consumption.

Eric Lindblom, research director for the Campaign for Tobacco-Free Kids, says he expects a drop of at least 6 percent to 7 percent among young smokers.

Philip Gorham, who tracks the tobacco business for Morningstar, the investment research firm, said he expects an overall drop of 4 percent to 5 percent this year. What happens after that is less certain, especially as the economy recovers.

"I would expect a road bump this year," said Gorham. "But these companies will still be extremely profitable. I still think they will make their return on capital by wide margins in the long run."

Philip Morris USA, the largest tobacco company and maker of Marlboro, is forecasting a drop, but spokesman Bill Phelps said he cannot predict how big. Philip Morris raised Marlboro prices by 71 cents a pack early this month, and prices on smaller brands by 81 cents a pack. Other major companies followed suit.

The pricing moves raised eyebrows. "That's nothing more than greed," said Kevin Altman, an industry consultant who advises small tobacco companies. "They weren't required to charge that until April 1. They are just putting that into their pockets."

Responded Phelps: "We raised our prices in direct response to the federal excise tax increase, and people who are upset about that should find out how their member of Congress voted, and contact him or her."

Some policy analysts have questioned the wisdom of boosting tobacco taxes to finance health care for children. They argue that the fate of such a broad program should not depend on revenues derived from a minority of the adult population, many of whom have low incomes and are hooked on a habit. The tobacco industry is also warning that the steep increase will lead to tax evasion through old-fashioned smuggling or by Internet purchase from abroad.

But smoking control advocates such as Lindblom say tobacco taxes should be even higher. "There's a lot of room to go after cigars and smokeless," he said. "We are certainly hopeful that health care reform will include some more increases."

Standing outside a Washington department store, attorney Margaret Webster, 42, puffed on a Marlboro Ultra Light and lamented the fact that the government is reaching deeper into her pocketbook.

"I don't think we (smokers) like it," she said. "But I've heard so many people say they were going to quit when the price went up ... and they're still smoking."

 

 


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by on Mar. 29, 2009 at 11:42 AM
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Replies (1-10):
ain-gell72
by on Mar. 29, 2009 at 11:48 AM

nope.

CouponCrazyChel
by on Mar. 29, 2009 at 11:48 AM

i really dont think its going to make as much of an impact as ppl think. they already are doing numerous studies and so far the percentage of ppl quiting is lower then it was in previous years.


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shervert1
by Member on Mar. 29, 2009 at 12:11 PM

it's going to hurt,but I will still pay $10 for a pack of cigarettes and I think the government knows that! I think it's a conspiracy because they put more and more chemicals in cigarettes and people end up getting hooked,It's not about our health it's about how much more money can the government suck out of people who have this weakness. Sadly I am one of them. 

I also find it kinda funny that the taxes on cigarettes will be used towards health care for children,maybe it should be used for smoking cessation programs if they are so concerned about peoples smoking habits?

    
mrs.c123
by New Member on Mar. 29, 2009 at 12:12 PM

no i dont think so... for one me and dh smoke, but we have "Cut back" but not completely quit, plus we get coupons from marlboro and kool so that takes off a little chunk when we buy our cartons. i understand where some people are having to quit because of the tax increase, but right now we dont have to...yet anway. but most of the people i know are still smoking...it hasnt changed their desire to quit any faster.

Mommy to Taryn a BUSY LITTLE 3 YEAR OLD BOY and WIfe to MY HOT ARMY SOLDIER!!! 


WifeyandMommy89
by on Mar. 29, 2009 at 12:12 PM

Made me quit. Seriously. When I paid 6.73 for a pack of Marlboro's 2 weeks ago... I gave the pack to my dad and I quit. Today is day 15 smoke free!!!!!


cdgoldilocks
by Bronze Member on Mar. 29, 2009 at 12:13 PM

My hubby smokes. I have tried to get him to stop smoking for health reasons. He isn't ready. He is addicted to the nicotine drug and he is addicted to the holding of the cigarette. I plan on buying him some nicotine replacement and gently letting him know I would support his desire to quit. The government knows most people are addicted and can't quit, so they raise taxes as a guaranteed source of tax revenue.

2egbhgx.jpg Eleanor Roosevelt image by whatadollx3


A government big enough to give you everything you want is big enough to take everything you have. -Barry Goldwater

PurdueMom
by Sherri on Mar. 29, 2009 at 12:40 PM


Quoting cdgoldilocks:

. . . The government knows most people are addicted and can't quit, so they raise taxes as a guaranteed source of tax revenue.


Can't quit or won't quit?   

Sherri
cdgoldilocks
by Bronze Member on Mar. 29, 2009 at 12:51 PM


Quoting PurdueMom:


Quoting cdgoldilocks:

. . . The government knows most people are addicted and can't quit, so they raise taxes as a guaranteed source of tax revenue.


Can't quit or won't quit?   

A little of both IMO. It has been implied in studies that Nicotine is more physically addicting than heroin. I am not sure if that is really true, but all animal creatures will avoid pain. If the government is really all that concerned about the health of it's citizens, then 100% of the tax revenue would go directly toward smoking cessation programs, nicotine replacement therapy, etc. In CA, much of the tobacco tax dollars go into indirect tobacco control programs, or programs that do not focus on getting people to quit.

I get what you are implying though, and people need to become accountable for their health and their choices.

2egbhgx.jpg Eleanor Roosevelt image by whatadollx3


A government big enough to give you everything you want is big enough to take everything you have. -Barry Goldwater

krissygirl
by Member on Mar. 29, 2009 at 12:54 PM

Fuck this.  I'm not gonna quit because of the tax.  Why don't they tax liquor more.  Maybe we'd have less drunk drivers.

Wyldbutterfly
by Bronze Member on Mar. 29, 2009 at 1:28 PM

While I know this will excite the non smokers. You had better think twice about this. Before you know it, before long, they will be taxing your habits as well, all under the guise of it "being healthy or better for you".  When bull chit taxes like this start knocking your door. You will be just as disgusted.

This tax is not to force people to quit. It's not about making people healthy.  It's all about collecting more money. Mark my words, you will be taxed next! Be careful what you wish for.

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