The Most Expensive Ingredient in Cigarettes

Jacob Sullum | April 4, 2008

The ABC affiliate in Albany reports that Gov. David Paterson and state legislative leaders have agreed on a $1.25-a-pack increase in New York's cigarette tax, making it $2.75. That will give New York the highest state cigarette tax in the country, surpassing New Jersey's rate of $2.57 a pack. Smokers who buy cigarettes in New York City pay an additional $1.50 a pack, so they will be shelling out $4.25 in state and city taxes, plus the 39-cent federal tax, for a total of $4.64 a pack.  They also have to pay sales tax, which in New York City is 8.38 percent. So a pack of cigarettes that would cost, say, $4 without taxes will cost New Yorkers more than $9, most of which will go into city, state, and federal coffers. In other words, the government will be taxing a product disproportionately consumed by poor people at an effective rate of more than 100 percent, reaping bigger profits than anyone else from a business it simultaneously condemns as the foremost threat to public health. It can get away with this punitive levy because the people it's bleeding are an unpopular minority with little political influence. And what do we call this policy? Progressive.