cigarette tax

On April 1, smoking in California became much more painful — to people’s wallets, that is.

The harmful health effects of cigarette smoking are still there — things like an increased risk of coronary heart disease, stroke, and lung cancer.

And cigarette smoking still causes more than 480,000 deaths each year in the United States, according to the Centers for Disease Control and Prevention (CDC).

But thanks to a statewide ballot measure approved last year, California’s cigarette tax is now $2.87 — two dollars more per pack than its long-time low.

The tobacco industry spent $71 million to try to defeat this measure.

With the increase, California has the ninth highest cigarette tax in the country.

This is well below New York’s $4.35 per pack state tax and Chicago’s $6.16 per pack, which includes both state and local taxes.

But it’s much higher than Missouri’s almost invisible 17 cents per pack.

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Cigarette taxes reduce smoking

The goal of the California tax is to increase the price of cigarettes high enough so that people quit smoking or never start.

But will it work?

The simple answer is “Yes.”

“The bottom line is that significant tax increases are the single most effective way to reduce tobacco use,” Frank Chaloupka, PhD, an economist and research professor of health policy at the University of Illinois at Chicago School of Public Health, told Healthline.

A “significant” tax means large enough for people to feel the pinch in their wallet — at least 10 percent of the current price per pack.

The bottom line is that significant tax increases are the single most effective way to reduce tobacco use.
Frank Chaloupka, University of Illinois at Chicago

“If you raise the price enough that companies can’t absorb it, or can’t offset it with their marketing practices,” said Chaloupka, “then you start to see real public health impact.”

A monograph by the National Cancer Institute, The Economics of Tobacco and Tobacco Control, found that in the United States a 10 percent increase in the price of cigarettes can reduce consumption by 4 percent.

Research at the University of California, San Francisco (UCSF), suggests that the state’s new cigarette tax will reduce its smoking rate even more. It’s currently around 12 percent.

“We estimated that just the price effect will cut smoking prevalence over the next five years to around 7 percent,” Stanton Glantz, PhD, professor of medicine and director of the UCSF Center for Tobacco Control Research and Education, told Healthline. “And that doesn’t even account for the effect of the reinvigorated anti-smoking program.” 

States sometimes use cigarette tax revenue to also prop up the state’s budget.

But some states reinvest a portion of the money into other anti-tobacco measures, which can boost the health effects of the tax.

We can very well wipe out tobacco as a public health problem in five years in California.
Stanton Glantz, Center for Tobacco Control Research and Education

“When you reinvest some of the tax revenues back into comprehensive tobacco control programs,” said Chaloupka, “you get bigger reductions in adults smoking, bigger effects on youth smoking, and larger overall reductions in cigarette sales.”

California’s tobacco control program will receive an estimated $120 million each year from the new tax, according to a report on KMIR television.

This anti-tobacco program, started 28 years ago, has been credited with preventing more than a million early deaths due to cigarette smoking, and saving more than $138 billion in healthcare costs.

“I think with the combined effect of the big price increase and the reinvigorated anti-smoking program,” said Glantz, “we can very well wipe out tobacco as a public health problem in five years in California.”

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Tax impacts some groups more

All smokers will be impacted by California’s new tax, but some groups will feel it more.

According to the CDC, people with low incomes, adults with mental illness, and the LGBTQ community all have higher rates of smoking.

And in California, the smoking rate is higher among African-Americans and Native Americans.

“They are, by far, carrying a much higher burden of tobacco-induced disease than the general public,” said Glantz.

People with low incomes, especially, will be affected because they have less disposable income.

But they will also benefit the most.

“They’re the ones who are smoking, so they’re the ones who are going to pay the tax,” said Glantz. “But with the increase in price, they’re the ones who are going to quit smoking.”

The cigarette tax will also head off smoking among young people.

“We find that youth uptake of tobacco is two to three times more sensitive to price than overall tobacco users,” said Chaloupka.

The high cost of cigarettes can have a big impact on the “transition period” — when teens are moving from smoking cigarettes bummed from their friends to buying their own.

Glantz also expects a boost to California’s economy, as he described in a post on The Conversation.

For every dollar spent on cigarettes — excluding taxes — 80 cents leaves the state, flowing mainly to tobacco-producing states.

When people quit smoking, they spend their money on other things, such as dinner at local restaurants or going to the movies. More of this money enters the local economy, where it supports jobs and economic activity.

“Not only is the tax going to reduce smoking, reduce healthcare costs, and improve health,” said Glantz, “it’s also going to be a huge job creator in California and a huge stimulus to economic activity.”

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