Chapter 36 Taxation

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The New York tobacco tax is now $1.11 per pack.

New York Times, December 18, 1999, p. A1

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For teenagers, the "price elasticity of demand" for cigarettes is three times higher

than the estimate for adults. For each 10% increase in the price of cigarettes, the

demand falls by 14.4%, with most of this being 12% fewer teens making the decision

not to begin to smoke at all. In Canada between 1979 and 1991, largely because of

tax increases, the percentage of teenagers ages 15 to 17 who smoke dropped from

47% to 16%.

Preventing Tobacco Use Among Young People, 1994 Surgeon General report, p.

271, and Canadian Medical Association Journal, June 15, 1992, p. 2231

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"This talk of $2 a pack is scaring us to death, and that's putting it mildly."

Congressman Charlie Rose (D-NC). "Tobacco Country is Quaking over Cigarette Tax

Proposal" (New York Times, March 22, 1993, p. A14). But the Wall Street Journal

reported on March 12, 1993 that 70% of Americans believe that a $2-per-pack

tobacco tax increase is an acceptable way to help pay for health care reform

(SCARC, March 3, 1993). And Jimmy Carter wrote: "Our children are the most

important reason for a major tobacco tax increase" (New York Times, March 3, 1993,

p. 16).

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Monday, July 24, 2000

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