Tobacco Taxation = Government Incentive
Many governments have introduced excise taxes
on cigarettes in order to reduce the consumption of cigarettes. Money
collected from the cigarette taxes are frequently used to pay for
tobacco use prevention programs, therefore making it a method of
internalizing external costs.
In 2002, the Centers for Disease Control and Prevention
said that each pack of cigarettes sold in the United States costs the
nation more than $7 in medical care and lost productivity. That's over
$2000 per year/smoker. Another study by a team of health economists
finds the combined price paid by their families and society is about
$41 per pack of cigarettes.
Substantial scientific evidence shows
that higher cigarette prices result in lower overall cigarette
consumption. Most studies indicate that a 10% increase in price will
reduce overall cigarette consumption by 3% to 5%. Youth, minorities,
and low-income smokers are two to three times more likely to quit or
smoke less than other smokers in response to price increases. Smoking
is often cited as an example of an inelastic good, however, i.e. a large rise in price will only result in a small decrease in consumption.
Many
nations have implemented some form of tobacco taxation. As of 1997,
Denmark had the highest cigarette tax burden of $4.02 per pack. Taiwan
only had a tax burden of $0.62 per pack. Currently, the average price
and excise tax on cigarettes in the United States is well below those
in many other industrialized nations.
Cigarette taxes vary widely
from state to state in the United States. For example, South Carolina
has a cigarette tax of only 7 cents per pack, the nation's lowest,
while New Jersey has the highest cigarette tax in the U.S.: $2.575 per
pack. In Alabama, Illinois, Missouri, New York City, Tennessee, and
Virginia, counties and cities may impose an additional limited tax on
the price of cigarettes. Due to the high tax rate, the price of an
average pack of cigarettes in New Jersey is $6.45, which is still less
than the approximated external cost of a pack of cigarettes.
In Canada, cigarette taxes have raised prices of the more expensive brands to upwards of ten CAD$.
In the United Kingdom,
a packet of cigarettes typically costs between £4.25 and £5.50
($8.50/$11.00) depending on the brand purchased and where the purchase
was made. The UK has a strong black market
for cigarettes which has formed as a result of the high taxation, and
it is estimated 27% of cigarette and 68% of hand rolling tobacco
consumption was non-UK duty paid (NUKDP)
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I'm not a smoker and I, along with other non-smokers, do not understand the reasoning behind the FDA's actions. Sure I've read the anti ecig reasons and for us they have nothing to do with the Ecig--greed, self-interest, and it's my way or no way.
Around a million people are using the ecig. That means our parents,children, and other family loved ones are off tobacco. It means that our neighbors, our friends, and other loved ones are off tobacco.
For years Americans question why certain products made it to the market that shouldn't but we always made excuses for the FDA because we didn't want to give up trust in them.
This though has stripped so many of any trust. As far as alot of people are concerned there ought to be an investigation into this government agency.
But such an investigation would mean involving government. Our senators and our congressman. So, not too many Americans would have any faith in the outcome because the majority of us don't trust our representatives.