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Interventions to Increase the Unit Price for Tobacco Products

The Guide to Community Preventive Services reports that increasing the unit price of tobacco products increases the number of people who stop using tobacco, reduces the amount of tobacco used, and reduces the use of tobacco among adolescents and young adults. Evidence also suggests that this intervention may reduce tobacco-related disparities by income, race, and ethnic group. Healthy People 2020 Tobacco Use objectives include a combined federal and state excise tax increase of at least $1.50 for cigarettes and smokeless tobacco products.

Governments can increase the cost of tobacco products by means of taxation, which can be earmarked for specific public use spending. In 2015, the average excise tax per pack of cigarettes across all states was $1.60. In addition to state tax laws, local tax laws at the city level can also add a significant cost per pack of cigarettes. However, some states prohibit local cigarette taxes or may limit the maximum tax rates.

Examples of Programs that Increase Taxation

  • The Raise it for Health-ND Coalition, which included over 40 different businesses and healthcare organizations, aimed to raise the state's tobacco tax during the 2015 North Dakota legislative session. North Dakota's tobacco tax is currently one of the lowest in the nation at $0.44 per pack. The coalition, led by Tobacco Free North Dakota and the state's American Lung Association, launched a statewide education campaign in 2014. The coalition found that a large percentage of residents in the state were unaware of how low the tobacco tax was and supported an increase in the state's tobacco tax.
  • In 2012, the Bethel City Council in rural Alaska passed a new tobacco excise tax that increased the price of cigarettes by $2.21 per pack. The council also increased the tax of all other tobacco products, such as smokeless tobacco, by 45%. Between April 2013, when the tax went into effect, and July 2013, the tax provided over $100,000 in revenue for the city.
  • The Maryland Health Care for All! Coalition launched the Healthy Maryland Initiative with the aim of increasing the state's tobacco taxes. The coalition, which included several hundred organizations across the state, was successful in working with the Maryland legislature to raise the tobacco tax by $1.00 per pack in 2007. The coalition now involves over 1,200 groups from diverse fields and continues to work on tobacco taxation issues. In 2012, it helped increase state taxes on smokeless tobacco and little cigars.

Considerations for Implementation

According to The Community Guide, it is important to expand access to cessation services following adoption of increased taxation policies. Revenue from taxes can be used to support tobacco control and prevention programs and services. Another important consideration is if state preemption laws will impact local tobacco tax policies. Despite this barrier, many community members show support for large increases in tobacco tax. Public health coalitions may be useful in supporting in the unit price for tobacco products. Other political and economic considerations are described in The Community Guide Preventive Services Task Force's finding and rationale statement on this topic.

Resources to Learn More

Higher Tobacco Taxes Can Improve Health and Raise Revenue
Document
This research shows that when tobacco taxes are raised, fewer people are likely to smoke. This effect is particularly pronounced among young and low-income people.
Author(s): Marr, C. & Huang, C.
Organization(s): Center on Budget and Policy Priorities
Date: 3/2014

Public Health Law Center
Website
This website provides resources for various tobacco control issues, including taxation and product pricing, preemption, and sales restrictions.

State Cigarette Excise Tax Rates & Rankings
Document
This fact sheet includes a table listing all state cigarette tax rates as of October 1, 2015.
Author(s): Boonn, A.
Organization(s): Campaign for Tobacco-Free Kids
Date: 9/2015

Tobacco Free Initiative (TFI)
Website
World Health Organization (WHO) endorses taxation on tobacco products to reduce consumption. The WHO believes that elevating tobacco prices is the most potent and cost-effective option for governments around the world to reduce the use of tobacco.
Organization(s): World Health Organization

Tobacco Tax Revenue by State 1977-2015
Document
A fact sheet produced by the Tax Policy Center that shows a chart of “State and Local Tobacco Tax Revenue, Selected Years 1977-2015.” The chart provides tax revenue amounts for the United States, eight regions of the country, and each state.
Organization(s): The Urban Institute-Brookings Institution Tax Policy Center
Date: 10/2017