Economics taxes on cigarettes - Smoking-related illnesses remain the leading cause of preventable death in the United States with more than 540,000

Economics taxes on cigarettes - Smoking-related illnesses...

This preview shows page 1 - 2 out of 2 pages.

- Smoking-related illnesses remain the leading cause of preventable death in the United States, with more than 540,000 deaths annually, and cost the country more than $300 billion each year, including $170 billion for direct medical care for adults and more than $156 billion in lost productivity. Yet the federal tax on cigarettes has not increased since 2009 when the Children’s Health Insurance Program Reauthorization Act raised the tax to $1.01 per pack. State taxes per cigarette pack average $1.78, with rates ranging from 17 cents in Missouri to $4.50 in Washington, D.C. - How effective is taxing cigarettes? Not very - According to the World Health Organisation, price increases on cigarettes are highly effective in reducing demand. - On average, a 10% price increase on a pack of cigarettes would be expected to reduce demand for cigarettes by about 4% in high-income countries and by about 5% in low- and middle-income countries, where lower incomes tend to make people more sensitive to price changes.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture