Cigarette Revenue Declining

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nicnik

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It was always about the $$. When you see that states are only using about 2% of the settlement for tobacco cessation programs, it's hard to argue.
I'd like to know how much of that 2% supposedly spent on tobacco cessation goes for anti-vaping propaganda. That would technically be anti-tobacco cessation, and should not be counted with the tobacco cessation money.
 

Bill Godshall

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Cigarette tax and MSA revenue have been declining for years due to declining cigarette consumption. Nothing newsworthy about that.

As one who has campaigned to increase cigarette taxes since 1990, I was never interested in any of the money
(nor were most others who advocated cigarette tax hikes).

And as nicnik wrote, that last thing vapers should desire is for governments to spend even more money lying about vaping.
 

nicnik

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Cigarette tax and MSA revenue have been declining for years due to declining cigarette consumption. Nothing newsworthy about that.

As one who has campaigned to increase cigarette taxes since 1990, I was never interested in any of the money
(nor were most others who advocated cigarette tax hikes).

And as nicnik wrote, that last thing vapers should desire is for governments to spend even more money lying about vaping.

I certainly was interested in the money that I paid in taxes. I've never had much money at all, and losing so much to taxes did a lot of damage.

So, did Smoke-Free Pennsylvania never receive any money that came from taxes or MSA payments, or did you just never ask for any?
 

Lessifer

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I will give the benefit of the doubt and just say, for the sake of not arguing, that public health groups might not be all that interested in the increased funds from cigarette tax hikes. They only see a very small portion of that anyway. They do, however, put the mechanism in place for states like California to pat themselves on the back for "combatting smoking" while trying to implement a 100% tax hike to make up for a mediCAL budget shortfall. The states are definitely interested in that money.
 

Lessifer

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I've read mixed things about the efficacy of sin taxes, especially past certain thresholds. I don't remember where I read it, but it was something like there would need to be a 200% tax increase to see a 5% decline in the smoking rate.

Those who can easily quit, do so fairly early. Those who continue to smoke will do so at the expense of other aspects of their lives. As someone who has more than once chosen to go without food for a day so that I could buy a pack of smokes, I understand that.

Then of course there's the whole, what gives you the right to decide I should be punished for partaking in a legal activity, thing.
 

BuGlen

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I've read mixed things about the efficacy of sin taxes, especially past certain thresholds. I don't remember where I read it, but it was something like there would need to be a 200% tax increase to see a 5% decline in the smoking rate.

Those who can easily quit, do so fairly early. Those who continue to smoke will do so at the expense of other aspects of their lives. As someone who has more than once chosen to go without food for a day so that I could buy a pack of smokes, I understand that.

Then of course there's the whole, what gives you the right to decide I should be punished for partaking in a legal activity, thing.

And that ratio (tax increase / usage decline) might have held true if it weren't for those pesky vapor products. Now that we have a safer and enjoyable alternative, a huge tax increase could well push more of those remaining on the fence toward vaping which would result in a net loss of state revenue. All their plans for balancing state budgets go out the window when a disruptive technology hits the market.
 

Rossum

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And that ratio (tax increase / usage decline) might have held true if it weren't for those pesky vapor products. Now that we have a safer and enjoyable alternative, a huge tax increase could well push more of those remaining on the fence toward vaping
Be careful what you ask for, you might just get it -- good and hard. The more tobacco tax revenue the statists figure they "should" be getting, the more tempted they will be to tax vapor products at equivalent rates, particularly as more people switch to vaping.

The current $1.01 per pack federal tax alone works out to roughly 5 cents per milligram of nicotine. That would be $18 in tax for a 30ml bottle of 12mg e-liquid or $5000 for a liter of 100 mg nic base. Now figure in some state taxes as well, many of which are considerably higher.
 

BuGlen

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Be careful what you ask for, you might just get it -- good and hard. The more tobacco tax revenue the statists figure they "should" be getting, the more tempted they will be to tax vapor products at equivalent rates, particularly as more people switch to vaping.

The current $1.01 per pack federal tax alone works out to roughly 5 cents per milligram of nicotine. That would be $18 in tax for a 30ml bottle of 12mg e-liquid or $5000 for a liter of 100 mg nic base. Now figure in some state taxes as well, many of which are considerably higher.

I have no doubt that we're already beyond "tempted" and into the "how do we get away with it" stages at this point. There are many states in this country who gambled against the will of smokers to be able to quit by selling tobacco bonds leveraging future tobacco taxes and MSA revenue. Those states with the highest debt in bonds will be the hardest hit as smoking rates continue to decline at record rates, and they'll be the first to try to tax and restrict vapor products to protect their interests.
 

Stubby

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Cigarette tax and MSA revenue have been declining for years due to declining cigarette consumption. Nothing newsworthy about that.

As one who has campaigned to increase cigarette taxes since 1990, I was never interested in any of the money
(nor were most others who advocated cigarette tax hikes).

And as nicnik wrote, that last thing vapers should desire is for governments to spend even more money lying about vaping.
That sounds all nice and good, until it is dug into a bit more. The subject of taxation and restrictions came up on Carl Phillips blog recently in the comments section that lead to some interesting observations.

Nearly all of the quitting cigarettes took place before we had the massive tax increases of the new century. The reason is people who quit did so as the risk of smoking became apparent in the 70's, 80's, and 90's. It had little to do with increased taxes.

Mexico, which had essentially the same smoking rate as the US in the 60's, saw similar declines in smoking rates (and continue to do so) despite the fact that cigarettes remained relatively inexpensive, and the government did not get involved with the demonization of smoking (and smokers).

Nearly everything tobacco control has done except for the early days when they informed the public about the dangers of smoking have done nothing of real value, but did cause a great deal of harm to smokers.
 

skoony

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Nearly all of the quitting cigarettes took place before we had the massive tax increases of the new century. The reason is people who quit did so as the risk of smoking became apparent in the 70's, 80's, and 90's. It had little to do with increased taxes.
True enough. That does not explain the unprecedented decrease starting around 2009.
Prior to that smoking appeared to have leveled off. Bill did say sales were declining anyway.
Mike
 
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