Raising taxes on cigarettes: the debate goes on

Raising taxes on cigarettes

Although the policy of governments and authorities the world over to be raising the tax they impose on cigarettes and tobacco products, under the main excuse that such measures are very effective to curbing smoking as a bad habit that damages people’s health, is very popular but has a lot of critics as well and the relevant discussions have never actually subsided, it appears that the debated has recently been re-invigorated.

In fact, getting hold of a cheap pack of cigarettes, manufactured and sold legally at a shop down the road appears to be rapidly becoming an impossible task, especially since many countries have recently imposed steep increases on the taxes on cigarettes, resulting also in a huge increase in the retail price of a pack. Such examples include, South Africa, South Korea and even Palau, while recent reports have talked about an upcoming increase in China, while smokers in the USA have not fared better since according to the Washington Post during the period between the years 2000-2014, a total of 45 American states have increased tobacco taxes one or more times.

More specifically, 19 states increased taxes on tobacco products in 2003, 15 states in 2004, and 16 states in 2010, with Connecticut, New York, Rhode Island and Vermont having raised tobacco taxes more than any other states, hiking them six times each since the 2000 fiscal year. According to the US Tax Foundation per-pack tobacco taxes are currently the highest in New York, but one should bear in mind that more than half the cigarettes consumed in the state are smuggled in from out of state.

This is perhaps what has spurred Steve Forbes to recently publish a commentary in Forbes, aptly entitled “Why Most Cigarette Taxes Should go up in Smoke”, where he points out that one of the “evil by-products” of smoking “is the tendency of politicians to hit cigarette smokers with heavy taxes.” He explains that this happens because “It’s an easy twofer: The pols proclaim their virtue by saying that these levies will reduce use, and they get more money to play with.” However, he points out that when politicians overdo it, as in the case of New York, which he calls “tragic” since the total taxes on a pack of cigarettes add up to a whopping $5.85, with the city levy on cigarettes being $1.50 per pack and the state’s levy is $4.35.

Steve Forbes argues that this very high taxation leads to bootlegging thriving, resulting in over half of the smokes sold in New York being smuggled in, either from low-tax states or from Indian reservations and he points out that as a result there are a lot of street vendors selling cigarettes by the pack or singly. Citing the example of Eric Garner, who was peddling bootlegged loose cigarettes when approached by police and ended up dying tragically while allegedly resisting arrest, the commentator points out that authorities “shouldn’t have to spend their time tracking down illegal cigarette traffickers.” Moreover, he maintains that “both city and state would do everyone an immense favor by slashing these destructive levies” since he believes that in this way “smuggling would drop precipitously,” while politicians “would probably collect more in taxes.”

While this is an eloquent way of presenting some of the arguments against the imposition of high taxes on cigarettes, which renders them immensely expensive and thus leads vendors and smokers to resort to illegal dealings, one should not overlook the fact that the other side of the argument, which favors high taxes, also has valid points to present. One such example is a recent study which was published in the New England Journal of Medicine, the findings of which indicate that tripling the tax on cigarettes across the world would prevent 200 million premature deaths from lung cancer, while the drastic increase in tax would cut the number of smokers by a third as prices double. Moreover, the argument is put forward that such an increase would also narrow the price gap between the cheapest and most expensive cigarettes, encouraging people to quit rather than switch to a cheaper brand.

It is reminded that at the United Nations General Assembly and the World Health Organisation’s 2013 Assembly, countries across the world agreed to cut smoking rates by a third, by 2025 in an effort to reduce the number of premature deaths from cancer and other diseases related to smoking, by a quarter. In order to achieve this aim governments are obliged to take the relevant measures that this new study is cited as demonstrating that tobacco taxes are a hugely powerful lever and potentially a triple win – reducing the numbers of people who smoke and who die from their addiction, reducing premature deaths from smoking and yet, at the same time, increasing government income.

Therefore, many urge governments to regularly raise the price of tobacco through taxation as they view this as being the single most effective way of reducing smoking, since high prices not only encourage smokers to cut down and quit, but also discourage young people from starting to smoke.

Obviously the debate on cigarette taxation will continue to occupy a main part in public discussions. At the same time, smokers, who knowingly take the decision to keep up the habit, should be aware of the dangers associated with buying bootlegged, illicit cigarettes. We fully understand however that having to pay such high prices is not an option for them as well and this is why we aim, through our guide, to help all smokers locate high quality but affordable, cheap cigarettes to buy online. Remember to check our price comparison tables and visit our recommended online cigarette stores which will immensely help you have low priced but good cigarettes delivered right to your doorstep.