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Cigarette Taxes Go Up As States Seek To Close Budget Gaps

July 6, 2010 by  

Cigarette taxes go up as states seek to close budget gaps Plagued by ballooning budget deficits, five states across the nation raised cigarette taxes on July 1 in an effort to close those gaps. However, opponents argue that this approach may be counterproductive, as it may cost businesses more in terms of lost sales.

The affected states are New York —where the increase has been the highest, from $1.60 to $4.35 per pack—Hawaii (40 cents to $3), New Mexico (75 cents to $1.66 ), South Carolina (50 cents to 57 cents) and Utah ($1 to $1.70).

Many local politicians chose to stress the alleged health benefits of smoking cessation, which some believe will come about as a result of the taxes. This has been echoed by Campaign for Tobacco-Free Kids, which called the measure a win-win for the states.

"These actions… are a huge victory for the nation’s health that will save many lives and billions of dollars in tobacco-related healthcare costs," said Matthew L. Myers, the campaign’s president.

However, critics counter that the tax hike will jeopardize businesses while having a negligible effect on public health. In particular, many believe that smokers will simply travel to neighboring states or order cigarettes online.

For instance, Deseret News, a local newspaper in Utah, cited the example of Jeanie’s Smoke Shop in Salt Lake City that has been forced to shut down this week after decades in business because of dwindling numbers of customers put off by higher taxes on cigarettes, pipe tobacco and cigars.ADNFCR-1961-ID-19869572-ADNFCR

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