Obama's First Tax Hike Takes Effect

Today the federal cigarette tax rose from 39 cents to $1 a pack. This is the first tax hike signed by President Obama, and it breaks his promise not to raise taxes on people of modest means. In fact, it's pretty much the most regressive way Congress could have picked to fund an expansion of the State Children's Health Insurance Program. Still, the federal tax pales in comparison to the cigarette levies imposed by many states. The highest right now is New York's, which is $2.75 a pack, on top of which Big Apple residents pay a $1.50 city tax, for a total of $5.25 in federal, state, and city taxes, plus the 8.4 percent sales tax, all of which pushes the retail price to $9 or $10. Since taking money from an unpopular minority is a lot easier than imposing a broad tax hike or cutting spending, many states are likely to raise their cigarette taxes this year.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • ||

    Sorry, I don't smoke - so I must hate children.

  • ||

    Well, this will be a game changer!At ten bucks for a pack of cigarettes the Mexican cartels will abandon coke and wacky weed - why bother when tobacco will pay just as well? Nickel bag with a nice shiny box and cellophane wrapping...

    Soon , all the illegal immigrants will have to do is tuck a carton of smokes under each arm, and it's "endenidos a los Estados Unidos, compadre..." The coyotes won't need to cut holes in the Great Border Fence. Desperate US smokers will do it for them.

  • ||

    Sorry, that was supposed to be " Bienvenidos"

  • hmm||

    I see an income opportunity.

  • ||

    In fact, it's pretty much the most regressive way Congress could have picked to fund an expansion of the State's Children Health Insurance Program.

    The levies on imported cigars are much, much worse:

    "Under SCHIP, large cigars will be taxed at 52.75 percent, with a cap of 40.26 cents per cigar. This enormous increase, up from the previous rate of 20.719 percent with a cap of 4.875 cents per cigar, has many worried that it will devastate an industry already under siege due to state tax hikes and smoking bans.

    ...the SCHIP tax increase had the potential to devastate not only cigar retailers, manufacturers, and consumers, but could also lead to widespread unemployment and crime in the Dominican Republic, Honduras, and Nicaragua-the three main sources of premium handmade cigars...taxes, even more so than smoking bans, could devastate retailers since cigars are a "non-addictive luxury item," which smokers could easily cut back on in response to higher prices."

    From http://www.stogieguys.com/2009/04/04012009-stogie-news-massive-cigar-tax-hits.html

  • ||

    Soon , all the illegal immigrants will have to do is tuck a carton of smokes under each arm, and it's "Bienvenidos a los Estados Unidos, compadres..."

    Back in the old days of Mexican Protectionism (the 80s), Americans used to FLY small cargo planes loaded with TVs and other stuff from the US to Mexico, because of the difficulty for Mexicans to buy foreign goods. Seems like now the roles will be reversed.

    I will be looking at the paper for a cheap, used Cessna... or a Piper... Hmmm.

  • hmm||

    Buying cigars and alcohol are why international vacations exist.

  • Suki||

    A friend in VA told me a bit ago today that he paid almost $5.00/pack in a DoD facility today.

    Dreading when this carton in my freezer runs out.

  • ||

    No No NO NO

    This was NOT a tax increase.

    The Bush administration had infected all the computers with a virus that launched a secret, stealth program thingie that raised the cigarette tax to $5 per pack effective today.

    We were able to REDUCE the tax by 80% through our strenous efforts.

    We had to retain that Bush tax increase at $1 because, ah, ah.

    Its for the children!

    Yeah, that its it -- heathcare for children

    Its not a tax, its a sacrifice

  • Kolohe||

    @ FTG's first post.

    There is some evidence that while higher taxes lead to an overall lower market size, they also cause some to still are in the market to substitute more 'premium' goods - because the cost of upgrading is less on a % basis.

    This is why Philip Morris generally likes tobacco taxes and why their stock continues to do rather well - it increases their market share as generic mass competitors become less attractive even if slightly cheaper. (it's also why it's more common for builders to make 'luxury condos'. Or why car makers only make money on SUV's)

  • Your right to swing your smoke||

    ...ends where my nose begins. Sorry.

  • HaroldBeaver||

    The illegals are already bringing it up with them in California. You can get Mexcian Marlboros and Newports for about $22 a carton if you know where to look (try downtown LA). But they aren't the same quality I hear. Better than counterfeit though.

  • ||

    You can now buy a carton online for less than 2 packs in NY (http://www.cigoutlet.net/cigarettes/marlboro-cigarettes.html)

    It gets even more regressive when you see that those with brains and computers can get their Marlboro lights at $1.40/pack online.

  • Xeones||

    Anybody know how difficult it is to grow tobacco in small batches, or if it's even feasible? I'm about to start baccoleggin' up in here.

  • Suki||

    Anybody know how difficult it is to grow tobacco in small batches, or if it's even feasible? I'm about to start baccoleggin' up in here.

    Not sure about growing small batches but I hear curing and all of the things one must do to make it what we are used to buying is difficult.

  • ||

    Florida wants to raise the state tax on cigs too. It's to pay Medicaid for smoking related illnesses.

    Wait, wasn't was what the lawsuit was for?

  • Hugh||

    Anyone manufacturing locking cigarette tins yet?

  • Kevin||

    Didn't Obama just quit smoking? What an ass.

  • smartass sob||

    Florida wants to raise the state tax on cigs too. It's to pay Medicaid for smoking related illnesses.

    Wait, wasn't was what the lawsuit was for?


    No, Isaac, the lawsuit was for the sake of the legal profession and for the sake of the legislators who receive campaign contributions from the legal profession.

  • hmm||

    I'd bet my next paycheck he still smokes.

    Curing tobacco isn't rocket science. Wood box tall enough to hang tobacco and allow an electric heater and humidifier in the bottom. All you are doing is sweating out the flavors and aromas you do not want. Growing it is about as hard as planting seeds in a fertile soil and watering.

  • Hugh||

    Type 2 diabetes, which is linked to obesity and a sedentary lifestyle, accounts for 90% to 95% of cases. In 2005, $15 billion was spent on prescriptions and $10 billion was spent on doctor visits.

    While politicians are legislating morality, why stop at cigarettes?

    Why not whack junk food with a ginormous tax?

    Hell, why not just tax every vice we have?

    Where does the madness end?

    And we call ourselves a free society? It's laughable.

  • DEA Swat Team with Thermal Ima||

    allow an electric heater

    We got a live one, boys!

  • K.T.||

    Not that I want to tax alcohol anymore than it already is, but I've thoroughly enjoyed pulling out this gem of a study, from JAMA, to all my drinking friends who criticize smokers... I'd be curious to see it updated. My guess is it would be even more true than it was then, given the decline in smoking rates and increase in tobacco taxes. Although, at the same time, more smokers/former smokers are on Medicare now so who knows.

    Taxes of Sin

  • ||

    Hello, smuggling.

    I'm guessing the geniuses in the congress haven't thought this through.

    -jcr

  • ||

    Let the republicans go after some other country and stop terrorizing the USA with their continuous BS of policies that got us here in the first place...

  • SIV||

    Growing it is about as hard as planting seeds in a fertile soil and watering.

    I can tell you've never grown tobacco.

  • ||

    I would be a very happy American to see the republican party die in its tracks , Which is highly to happen do to the millions who have had a stomach full of Bush and republican congress
    from 1994 to 2006. There payoff to wall street disguised as a bailout and a mountain of lies from Paulson & Bush

  • ||

    Hey larry, the thread you're looking for is back there in the archives...somewhere around January 21st.

  • Elemenope||

    Your right to swing your smoke...ends where my nose begins. Sorry.

    Which when pushed to its logical conclusion, reads:

    "Your right to exist ends where my awareness of you existing begins."

    The whole "nose/fist" rhetoric is not portable to merely annoying situations. Hell is other people, fucking get over it. You will not get lung cancer from occasionally having to sniff the crap the comes off other people's cigarettes.

    Some situations are slightly different; I feel for waitresses in smoke-clogged bars. Their exposure dose is somewhere above "annoying occasional whiff of something I don't like". But the war on smoking is justified on far thinner grounds, like this whole "why should I have to smell what you are smoking" crap.

  • Rhywun||

    > You can now buy a carton online for less than 2 packs in NY

    The last time I bought cigarettes online that criminal Eliot Spitzer had a policy in place for the post office to steal them. Maybe I'll try this outfit once, and see if it works.

  • ||

    Personally, I couldn't care less. No one makes you buy cigs. You don't need them to stay alive.

    Grow up, already. I've never seen so many children disguised as adults.

  • Elemenope||

    Chup -- what activity do you like? How would you feel if society at large decided to tax the shit out of it because they didn't like it?

  • ellipsis||

    I just saw on the 11pm news that Oregon is considering raising the age to buy tobacco from 18 to 21. Considering Portland makes up almost half the State population, what could possibly go wrong? (For those not in the area, google map Portland.)

  • Brett Stevens||

    Smoke your cigs outside. Doesn't need to be a law, just civility. Bars are an exception.

  • Geoff Nathan||

    If you want to read a really disgusting rant about this tax, read Roland Martin's article on the front of the CNN website. Basically, he hates smoking, it's BAD!!!!, so it's OK, even if it's disproportionately directed to low income folks--apparently they need special protection against themselves.
    Good thing he doesn't dislike Jews or Blacks.

  • Jolene||

    People at work think its fair because they don't smoke and its for the children. They'd be complaining if it was a commodity they used daily and the price doubled over night, children or not.

  • High Every Body||

    Smoke your cigs outside. Doesn't need to be a law, just civility. Bars are an exception.

    If it is my bar then it should be my rules, no exeptions.

  • ed||

    Are Indian "nations" still exempt from the tax?

  • ||

    I'm not a legal mind, but how do these taxes differ from a legislative body meting out punishment? I thought that was unconstitutional (not that that matters anymore).

  • ed||

    I've never seen so many children disguised as adults.

    You've never watched C-Span, then.

  • ||

    Why not whack junk food with a ginormous tax?

    Or red meat? I wonder how the insufferable Roland Martin would feel about a 100% tax on the juicy steak he wants to enjoy sans cigarette smoke.

    Also, Martin seems to be saying that higher cigarette taxes will equal less smoking in public places. I'm not sure, exactly, how that's supposed to work.

  • ||

    I see an income opportunity.

    Be very careful. Organized crime is already big into tobacco smuggling and tax stamp forgery. They don't like competition.

    The tobacco plant, BTW, isn't hard to grow. It takes good soil and a ton of fertilizer.

    Good smoking tobacco? There's a real art to it - very labor intensive. Stripping leaves, curing, the whole thing. If you get something you can stand to smoke, be careful - the nicotine load will knock your socks off the first time you try it.

  • ||

    Personally, I couldn't care less. No one makes you buy cigs. You don't need them to stay alive.

    Grow up, already. I've never seen so many children disguised as adults.


    Give me ten minutes in your house and I can find tens of thousands in tax revenue using that criteria.

    Don't try out for the Junior High debating squad, you'll get your stupid ass handed to you by a bright 13 year old.

    IOW, you are a not very bright judgemental asswipe.

  • ||

    I don't understand why the government is doing this at the same time as making it tougher to smoke.

    The government *SHOULD* be allowing people to smoke in malls, in (the smoking areas of) restaurants, in movies, and pretty much wherever.

    And *THEN* charging for the smokes.

    None of this "only bad people do this thing that brings in money".

    It's like no one up there has any idea what they're doing.

  • ||

    Smoke your cigs outside. Doesn't need to be a law, just civility

    Of course, civility applies to everyone in civil society, and would also militate against wetting your panties every time someone lights up indoors.

    Tolerance that doesn't go both ways is intolerance.

  • Billy Beck||

    Up here in the weeds and farmlands of the Finger Lakes in The Vampire State, a pack of cigarettes is now over eight dollars. This, in the middle of a functional depression years long now.

    If the animals in Washington and Albany understood the anger over this, they would lock themselves in the cellar.

  • ||

    lol. It seems to me that you people complain about taxes regressive, progessive, or extant. A pretty hollow complaint. Are there any taxes that would make you happy?

  • ||

    ..and some people confuse the two definitions of the word "free".

  • ||

    Are there any taxes that would make you happy?

    A stupidity tax. You'd be in an extremely high bracket.

  • dfd||

    Nice thing about comments that start with "lol" is that you don't even have to read them to know they are not going to be the most insightful comments in the thread.

    Come on Ray, you can do better. Try reading again and maybe you'll notice there are a variety of very non-"hollow" reasons to object to this kind of tax discussed above. If you can't bring yourself to actually engage them on a little more substantive level, fine, but your "hollow complaint" line seems rather unintentionaly ironic.

  • --||

    "Are Indian 'nations' still exempt from the tax?"

    My understanding is that since it's a federal tax it applies to the reservations as well.

  • ||

    You lucky cunts

    I pay 2 euros 45 a pack in tax

    and I don't get socialized health care because I'm a foreigner

    I've always intended to quit smoking
    but just cus the government wants me to quit
    I really feel like I shouldn't

    if I don't quit I have to give the cunts a sizable chunk of my salary

    Smokin lots of sensi is probably the only sensible solution to the problem but my head is far to fragile to be permanently twated nowerdays

    Fucked if you do fucked if do don't


    Its just a plant why do they get to control it?

    ahh man whiskey time

    more tax

    grrr

    grumble grumble

  • ||

    Smoke your cigs outside. Doesn't need to be a law, just civility. Bars are an exception.


    Did I miss something? Does this have anything at all to do with Osama the financial terrorist raising taxes on the poor? It is good advice, and that is something I always appreciate, but I'm not seeing any sort of connection to the subject at hand or anyone else's post...not that I don't throw out some random BS on that rare occasion. Wait a minute...you're not selling anonymity software, are you?

  • Medic||

    Monkee-smoke weed its cheaper and FAR BETTER for you.

    infact...
    get an atomizer instead.

    smoking the burned leaves of ANYTHING isn't good.

  • Ben||

    > It breaks his promise not to raise
    > taxes on people of modest means

    No. "People of modest means" have the option to smoke, or not. If they choose not to smoke, the IRS won't come to their door and take this tax from them; that's because it isn't an actual tax on people of any particular means.

    It's a tax on cigarettes.

    This is just like a tax on cheeseburgers - at any level: carcass, slaughter, distribution, manufacture, preparation - If you don't like the tax, stop eating cheeseburgers. You can opt right out.

    What you're doing here is simply whining because your favorite form of self-abuse has become more expensive.

    Find a substitute. For instance, some gum. There are side benefits, too: it's far less expensive as a habit, your breath won't smell like a cat took a dump in your mouth, your hair and clothes won't smell like a bus stop, your teeth will be easier to keep some semblance of white, and your cancer risk will drop like a stone after a few years of your body repairing the idiocy you've subjected it to. If, of course, it isn't already too late.

    Or, you can man up, admit that what you're doing has a cost to society as presently constituted, and save your complaints for actual taxes on people. Not products, dangerous or otherwise.

  • Ben||

    > Your right to swing your smoke...
    > ends where my nose begins. Sorry.

    > Which when pushed to its
    > logical conclusion, reads:

    > "Your right to exist ends where my
    > awareness of you existing begins."

    Actually, the correct formulation is:

    "Your right to swing your smoke ends where another's respiratory system begins."

    The presumption that the smell of smoke is the serious end of the problem assumes facts not in evidence. Though of course, it does smell terrible.

    The actual problem is the veritable Smörgåsbord of harmful substances in cigarette smoke, not all of which, unfortunately, are absorbed by the person who chooses to smoke.

    From www.cancer.org:

    "Secondhand smoke contains over 4000 substances, more than 60 of which are known or suspected to cause cancer."

    You *do* know what the traditional libertarian response to a personal assault is, don't you?

  • ||

    Smoking-related healthcare costs in US for 2007 + estimated productivity losses from smoking in US for 2007 = $167 billion (CDC)

    Expected total of the cost of the auto bailout = $130 billion (WSJ)


    Need we worry more about funding healthcare for kids with a tax on cigarettes?

    For added amusement watch Joe Scarborough make a total ass of himself (more so than usual) comparing a cigarette tax to a tax on puppies in this newsy story http://www.newsy.com/videos/paying_more_to_light_up/

  • Enough is Too Much||

    This is just like a tax on cheeseburgers -

    No, this is not just a tax. Smokers already pay more than their fair share for treating diseases that both smokers and non-smokers get. It is simply extortion. Just live your life the way we've decided for you and we won't rob you.

    Intolerance of liberty is un-American, whether you agree with that liberty or not. This is the basis for your own freedom.

    Now, I could waste my time explaining that to you and shredding all your facile arguments, but you Smoke Nazis are hardly worth the effort.

    You ought to be more careful about what you wish for.....

  • Ben||


    Smokers already pay more than their fair share for treating diseases that both smokers and non-smokers get



    That is utter nonsense. You and your supplier's "fair share" is *all* of smoking related discomfort; ALL of smoking related education; ALL of smoking related research; ALL of smoking related care. Why should *anyone* else pay *anything* because you're being an idiot?


    Now, I could waste my time explaining that to you and shredding all your facile arguments



    You haven't "shredded" anything. You've got a filthy, antisocial, unhealthy practice you think you ought to be able to pursue anywhere, anytime, no matter the discomfort or disease it causes others.

    My "facile" argument against this still stands: Your right to blow that cancerous crap around ends right where the respiratory system of others begins. You can't get around this.


    Intolerance of liberty is un-American, whether you agree with that liberty or not.



    Yes indeed. So what do we do with you when you blatantly demonstrate your lack of concern for others liberty to breathe clean air, and then when you go on to trample on that liberty?

    Exercised liberties must be:

    1) Personal *and* informed, or
    2) Consensual *and* informed

    Public smoking habits fail because they're NOT personal, and NOT consensual.

    You want to smoke? Fine. Do it at home. No one wants to increase their disease risk on your behalf any more than they want someone coming over and taking a crap on their dinner table and increasing their disease risk that way.

    Your problem -- and the problem with all smokers who think this habit is OK to pursue around non-consenting others -- is that while YOU want freedoms recognized, you're not willing to do the same for others. That makes you the enemy of liberty: Not its champion.

  • Foxy Queen||

    At this tax rate I choose to quit smoking.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Video Game Nation: How gaming is making America freer – and more fun.
  • Matt Welch: How the left turned against free speech.
  • Nothing Left to Cut? Congress can’t live within their means.
  • And much more.

SUBSCRIBE

advertisement