New Reports Prove Cigarette Tax Hikes Fail to Stop Smoking

Each year, it seems that we see new tax increases on cigarettes. These “sin taxes” are supposedly designed to deter people from buying cigarettes and help boost a state’s profit margins by capitalizing on addictions. New York has led the charge for higher cigarette taxes, but new reports show their aggressive tax plan has backfired, ultimately costing the state millions of dollars.

New York’s smoking tax has steadily increased over the past decade, making the largest jump in 2010 when cigarette taxes surged from $2.75 per pack to $4.35 per pack. Today, New Yorkers pay an average of $10.60 per pack on cigarettes purchased legally. With prices higher than ever, most people assume the state is striking it rich in all the excess revenue, but that’s actually not the case.

Instead, cigarette sales have plummeted in New York, but it’s not because smokers are kicking the habit. Instead, they are taking their business across the border to buy cheaper cigarettes from neighboring states. Many are also buying cigarettes through smuggling rings to avoid the added tax burden. Experts now believe that over the last decade, New York has suffered a $400 million loss in tax revenue thanks to the high tobacco taxes.

The New York Post reported that the state has already lost around $1.3 billion in uncollected tax money from smokers who are buying their cigarettes in bordering states or switching to cheaper alternatives.

The tobacco taxes have also increased the burden on local law enforcement by driving forward a black market for cigarette sales, contributing to growth of organized crime rings. For those that choose not to buy their cigarettes illegally, the high price is taking a major toll and it’s mostly impacting those who are already living in poverty. Reports show that low income residents spend an estimated 23.6 percent of their annual income on cigarettes, a horrific depletion of resources that is keeping people chained to poverty.

All things considered, it’s clear that New York’s high taxation approach to tobacco has been an utter failure. It has caused a decrease in tax revenue, and increase in organized crime, and pushed forward the cycle of poverty. Worst of all, the higher taxes haven’t decreased the number of smokers in New York or lowered the expense to public health resources.

Clearly, higher tobacco taxes don’t work. So how can lawmakers encourage the public to avoid tobacco use? Should they embrace alternatives like vaping and make them more accessible? Should they outlaw cigarettes altogether? How would you approach this issue if you were in leadership?

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