CIGARETTE TAXES ON CIGARETTE CONSUMPTION

The effect of cigarette taxes on cigarette consumption



The effect of cigarette taxes on cigarette consumption

Section 1

Article One explores the link between cigarette excise taxes, state economic considerations, and attitudes towards smoking. Do legislatures use cigarette taxes only to generate revenue or also as a policy tool to control smoking? The paper shows that the level of cigarette excise tax does not seem to be related to anti-smoking sentiment. Signing the Master Settlement Agreement by the states and leading tobacco firms seems to have been an impetus for states to raise cigarette taxes.

States that enacted smoking ban legislation over the sample period were also more likely to turn to cigarette excise taxes in times of fiscal stress. In Article Two, the effects of complete smoking bans in restaurants and bars on the prevalence and intensity of smoking examined. The results of the paper suggest that complete smoking bans have little impact on the prevalence of smoking and have a mixed impact on the intensity of cigarette consumption. While crowded bar bans do reduce the number of cigarettes smoked, entire restaurant bans increase the average number of cigarettes smoked.

Article Three uses micro-data at the household level to examine the effect that entire restaurant smoking bans have on the household's dining out expenditures. The essay finds that the bans have no discernable effect on the level of dining out expenditures for non-smoking and smoking households. Article three discusses increases in cigarette price associated with increased cessation and decreased consumption.

However, smokers can compensate for higher cigarette prices, such as a switch to cigarettes in the lower pricing tiers (discount cigarettes) or buying cigarettes without paying home state taxes (tax avoidance, low/untaxed cigarettes) on the Internet, from another state or Indian reservations, to avoid high cigarette prices (price avoidance), which is important from public health viewpoints, but there are relatively few studies on this topic.

Raising cigarette price is an effective way to control smoking. However, smokers may engage in price and tax avoidance behaviors after price increase, which may in turn undermine the public health benefits and result in uncollected revenue. Future cigarette pricing policies should strive to, not only increase the cost of cigarettes but also to eliminate lower priced products to maximize the public health benefit of higher cigarette prices. The last, fifth article discussed on the changes in cigarette purchase patterns will affect the consumption of cigarettes.

Thesis Statement

Raising cigarette price is an effective way to control consumption of cigarette.

Section 2: Cigarette Excise Taxes: Revenue Only or Does Anti-Smoking Sentiment Matter, as well?

Since 1921, when Iowa enacted the first cigarette tax, state legislatures have used cigarette excise taxes to raise revenue. In recent years, however, health advocacy and smoking prevention groups have urged legislatures to raise cigarette taxes as part of comprehensive smoking prevention programs. Since 2001, cigarette tax rates have increased along with the number and stringency of clean indoor air laws, while other sin tax rates have not ...