Market Overview

Tax ineffective in Deterring Low-Income Users reports South Beach Smoke


(EMAILWIRE.COM, October 26, 2012 ) San Francisco, CA - While higher taxes on cigarettes may burden low-income smokers, there seems to be no effect on the numbers of users, according to a survey by RTI International researchers.

13,000 New Yorkers were compiled in the survey, which found low-income smokers were spending 25% of their income on cigarettes. Wealthier smokers spent an average of 2%.

Nationally, low-income smokers are defined as those making $25,000 or less a year, and were spending 14% of their income on tobacco products.

New York is home to some of the highest smoking taxes, as $4.35 per pack. The national average is $1.46. Yet even with higher taxes, New York is not seeing a decrease in users among low-income users in the last ten years, according to RTI.

Excise taxes are effective in changing smokers behavior, Matthew Farrelly, chief scientist and senior director of RTIs public health policy research program, and study author, said in a statement. But not all smokers are able to quit, and low-income smokers are disproportionately burdened by these taxes.

There are studies that show that higher taxes have curbed smoking. Dr. John Spangler, professor of family and community medicine at Wake Forest Baptist Medical Center, said the tax reduces and eliminates smoking in areas. It does so enough to keep justify continuing the program. He stressed that what happens with the tax money should be focused on more.

What must be done, in the name for fairness, is to use the excessive taxation which the poor pay to help them stop smoking, said Spangler.

The price of medications and other alternatives to smoking is one of the largest barriers to many quitting. This problem is felt by low-income individuals for obvious reasons.

Spangler suggests that the revenue created by the taxes ought to be utilized by create low-cost smoking alternatives.

Dedicating some of the revenue from cigarette excise taxes for targeted programs that help low-income smokers quit may help alleviate the regressivity of cigarette excise taxes, the authors wrote.

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South Beach Smoke

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