Tobacco Excise Tax

Who Smokes and Who Pays?

By Deedee Sun and Lindsey Reese

chart 1 recent trend

As smoking rates among Massachusetts citizens fell from 28 percent to 14 percent between 1986 to 2010, the cost of tobacco taxes has been borne more by a group least able to afford it.

According to research and polls, the poor and the less educated smoke at a higher rate than those with higher incomes and more schooling. As a result Massachusetts’ ever increasing tobacco tax has become increasingly regressive.

“You’re really asking people who are already at the lower end in terms of wealth to be shouldering an additional burden of taxes to fund projects that really should be funded by the government,” said Dr. Michael Siegel of Boston University’s School of Public Health.

A 2008 Gallup poll of more than 75,000 individuals across the nation found that smoking rates rise as income drops. Those at the bottom fifth of the income bracket are more than twice more likely to smoke than those in the top fifth.

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Tax Addiction-States Becoming More Dependent on Tobacco Levies

By Cole Chapman and Brooke Singman

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Massachusetts lawmakers’ growing reliance on tobacco taxes to help balance the state budget is part of a national trend that has grown with each flutter of the country’s economy.

“To some extent you could say states became addicted to tobacco revenue,” said Scott Harshbarger, the former Massachusetts attorney general who helped negotiate the 1998 Tobacco Master Settlement Agreement that brings Massachusetts an average $250 million until 2025.

Cigarette tax revenues, along with the settlement money, brought in about $815 million last year, according to the Department of Revenue. That figure is expected to rise another estimated $165 million – for a total of $980 million – under the dollar-per-pack increase passed in this year’s legislative session.

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Anti-Smoking Programs Fall as Taxes Rise

By Petros Kasfikis and Mike Trinh

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source: Massachusetts Department of Public Health

Twenty years ago, supporters of a tobacco tax increase for Massachusetts had lofty goals for the money.

A voter-approved 1992 ballot initiative nearly doubled the cigarette tax from 26 cents to 51 cents a pack to fund the creation of the Massachusetts Tobacco Cessation and Prevention Program. The program used advertizing, counseling and other steps to help smokers quit.

By 1994, the program’s budget was $52.2 million – about 22 percent of the tax revenue.

But although the tax was increased three more times to the current $2.51 a pack, spending on anti-smoking programs dropped 92 percent as more and more tax revenue was used to plug gaps in the state budget.

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Taxing Tobacco Now a National Addiction

By Emily O’Donnell and Allison Thomasseau

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It seems one of the few things the Legislature and Gov. Deval Patrick could agree on in the debate over the state’s 2014 fiscal year budget was the dollar-a-pack increase in the tobacco tax – the fifth time the tax has been increased since 1992.

Beacon Hill isn’t the only place where politicians agree on tobacco levies. Forty-seven states have raised cigarette taxes a combined 105 times since 2002. Only California, Missouri and North Dakota have avoided the temptation, according to the Campaign for Tobacco Free Kids.

Raising tobacco taxes is an easy political choice: there is little opposition and plenty of support. But as Massachusetts grows more dependent on tobacco revenues now approaching $1 billion a year, the use of a sin tax to balance the books raises questions about who pays, where the money goes and how long it will last.

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