The New York Tobacco Tax Hike - Essay Example

RUNNING HEAD: THE NEW YORK TOBACCO TAX HIKE The New York Tobacco Tax Hike By On July the New York increased its excise taxes on cigarettes by $1.60 for every pack of 20 and $2 for every pack of 25. This increased cigarette excise taxes from $2.75 to $4.35 for every pack of 20 and from $3.4375 to $5.4375 for every pack of 25 statewide. In New York City, cigarette excise taxes went up from $4.25 to $5.85 for every pack of 20 and from $5.3175 to $7.3175 (NY Department of Taxation and Finance 2010 p. 101). These increases are raising actual cigarette prices at an average of $11 to $12 per pack of 20 within the city (Al-Muslim 2010). The NY excise tax increase is now considered the highest excise tax imposed by a state on cigarettes and tobaccos (NCSL 2010 p. 2). Opponents of the tax increase argue that it is inherently regressive because it affects the ‘have-nots’ more than it does the ‘haves.’ Furthermore, these increases are said to be defeating their purpose, which is to raise revenues, because they can drive away potential customers who may altogether quit smoking or who may use backdoor sources to obtain their fix. On the other hand, proponents of the tax measure, specifically the legislators, contend that it will help keep New York sustain and maintain its health care programs (Confessore 2010). The biggest argument, however, for the measure comes from health advocates and researchers who are extolling the tax increase as a vehicle for compelling smokers to quit the habit and ultimately saving more lives. If I were a member of the New York Legislature, I too, would have supported and voted for the passage of the latest round of excise tax increases on cigarettes and tobacco because it will ultimately redound to the good and welfare of the public. First, it is good for the public health because of the possibility of reducing smoking prevalence especially of the young, who are unwilling or unable to shoulder the rising cost of the habit, and; second, if it could not compel a significant number of smokers to quit, then the government will get to achieve its purpose of raising revenues to fund its health-related programs. That smoking is deadly not only to the person smoking but also to the people around him is already an established fact. This is evinced by the 1998 Tobacco Master Settlement Agreement (MAS) where top tobacco and cigarette producers agreed to compensate, in perpetuity, billions of dollars to a considerable number of states for the costs expended by the latter in the care of individuals suffering from smoking-related illnesses (A Broken Promise to our Children: The 1998 State Tobacco Settlement 11 Years Later 2009 p.135). In a 2009 report by the Center for Disease Control and Prevention (CDC), a federal agency tasked with public health protection, death due to cigarette smoking remains the top cause of “preventable morbidity and mortality in the United States” despite the launching of Healthy People 2010 in 2000 which was aimed at, among others, reducing smoking prevalence by 12% by 2010 (Cigarette Smoking Among Adults and Trends in Smoking Cessation - United States 2009 p. 127). In New York alone, more than 25,000 people die annually due to tobacco use while 570,000 others endure a diminished quality of life because of smoke-related illnesses (Santarella 2010). The recent increase in the excise tax on cigarettes and tobacco can potentially diminish the number of smokers in the state of New York and New York City. This is supported by the findings in a 2009 study conducted by Levy et al using the SimSmoke model that price increases of cigarette and tobacco brought about by tax increases have the second strongest effect, after evidence-based treatment, on population quit rate by as much as 65.9%. That study concluded that a combination of several factors could make the target 12% reduction in smoking prevalence set by the Healthy People 2010 achievable in just a few years. These factors, aside from increasing cigarette prices, are: evidence-based and cessation treatment; smoke-free indoor laws, and; mass media/educational anti-smoking drive (Levy et al 2010 p. 373). Similarly, both the CDC and the British Medical Journal have published reports claiming that tax increases are the most effective means of curbing tobacco demand. The surge of requests for smoke-quitting advice in June of the present year from New York’s 311, which tripled the number of requests of the same period in 2007 and the calls to NY State Smokers’ Quitline, which quadrupled the number of callers in last year’s number, all seemed to support this claim (Dembosky 2010 p. 22). The most significant outcome of the increase is its effect on teen smokers. According to a study conducted by Carpenter and Cook in 2006, cigarette price hikes have the most effect on high school students. Using data culled from the Youth Risk Behavior Surveys (YRBS) involving 750,000 youth, the study revealed that the tax increase that were imposed in the last 15 years significantly accounted for the decrease in the smoking prevalence of high school teens (2010 pp. 287-298). Discouraging teens from furthering a smoking habit that can persist into their maturity as an addiction, prohibitive cigarette prices preclude the early inception of the habit and prolong their life span. Moreover, this in effect, also delays the decision to take up smoking to the time when they become economically independent and mature and are more aware of the deadly consequence of the vice. On the other hand, the opponents of the tax measure often cite the argument that the tax will defeat its purpose, which is to raise revenues for health programs, because it will drive smokers to the black market. In addition, excise taxes are also seen as regressive because they affect the poor more than they do the rich. The argument contends that if smokers quit because of high cigarette prices or they continue smoking but buy from illegitimate sources would effectively kill the goose that lays the golden eggs. Nonetheless, since the purpose of the measure is to ultimately promote the health of the public through, among others, tobacco cessation programs, then compelling smokers to ultimately quit smoking because of high prices or even giving them a difficult time to obtain cigarettes and tobacco would have partially served its purpose. Furthermore, taxing cigarettes and tobacco to fund the government’s drive against cigarette and tobacco smoking does not only sound a little absurd but is often a hallow promise as shown by a study. The aforesaid study has revealed that only a meager 2.3% out of the estimated $25.1 billion money to be earned by the states from tobacco revenues for 2010 will be actually used for smoking cessation programs (A Broken Promise to our Children: The 1998 State Tobacco Settlement 11 Years Later 2010 pp 132-134). Furthermore, the regressivity of the excise tax on cigarettes (Remler 2004 p. 225) can be justified on the grounds of public welfare and public good. Smoking does not have only fatal consequences for the person smoking or for the people around him but on the public in general because of its ripple effect: the government will be burdened with partially shouldering the costs of the ensuing health care required by smoking-related illnesses, and; the non-smoking, tax-paying citizens will likewise suffer the consequences of tax money being shifted to fund smoking-related health care when the same could have been used for more productive government programs like infrastructures. Smoking kills. If raising the prices of cigarettes and tobacco through excise tax hikes could compel smokers, especially teens, to kick the habit and save their lives as a result, then such a tax measure is well-justified under the principle of public welfare and public good. Raising excise taxes on cigarettes and tobacco for revenue-purposes, whether it is ultimately achieved or not, is a secondary matter. If revenue-raising is not achieved because nobody wants to buy cigarettes at prohibitive prices, then this is still a win-situation. After all, is it not that the purpose of raising revenues through excise tax hikes on cigarettes and tobacco precisely to fund state health care programs like smoking cessation? References: (2002). Sinning Gets Expensive. Economist, Vol. 364 Issue 8292. (2009) A Broken Promise to our Children: The 1998 State Tobacco Settlement 11 Years Later. http://www.tobaccofreekids.org/reports/settlements. (2009). Cigarette Smoking Among Adults and Trends in Smoking Cessation - United States, 2008. MMWR 2009;58(44). Al-Muslim, A. (2010). Cigarette Tax Hike Bad for Bodegas, Top Stories. The Courier. Confessore, N. (2010). Cigarette Tax to Increase to Keep New York Running. New York Times. Carpenter, C. and Cook, P. (2008). Cigarette Taxes and Youth Smoking: New Evidence from National, State, and Local Youth Risk Behavior Surveys, Journal of Health Economics. Elsevier, http://www.elsevier.com/locate/econbase. Dembosky, A. (2008). More Smokers Seek Help with Quitting since Latest Cigarette Tax Took Effect. New York Times. Levy, D., P. Mabry, A. Graham, T. Orleans and D. Abrams (2010). Reaching Healthy People 2010 by 2013: A Sim Smoke Simulation. Am J Prev Med 2010;38(35). NCSL (2010). State Cigarette Excise Taxes:2010. http://www.ncsl.org/default.aspx?tabid=143. NY Department of Taxation and Finance (2010 June). New York State Excise Tax on Cigarettes to Increase on July 1, 2010. www.nystax.gov. Remler, D. (2004), Poor Smokers, Poor Quitters, and Cigarette Tax Regressivity. American Journal of Public Health 2004;94(2). Santarella, S. (2010). Lung Association Applauds Tobacco Control Measures. American Lung Association. http://www.lungusa.org/associations/state/new-york/pressromm/news. Syed, S. (2010). YNN: Cigarette Tax Could Help Smokers Quit, American Lung Association. http://www.lungusa.org/associations/state/new-york/pressromm/news/ynn.html. Read More