$1 Increase Will Elevate Massachusetts Cigarette Tax to Second Highest Among States; State Tax on Other Tobacco Products Now Highest in Nation
Washington, D.C. – June 26, 2013 – The Massachusetts state legislature took a major step to save lives and protect public health today by passing a $1 increase to the state’s cigarette tax which would bring the new total to $3.51 a pack. The increase, which was part of a larger transportation bill, is now with Governor Deval Patrick for his signature. Once enacted, the increase will elevate the Massachusetts state cigarette tax to the second highest in the nation, and will mean fewer smokers, more revenue and healthier futures for the thousands of kids who will never try smoking as a result. The increase will go into effect seven days after being signed into law.
“Increasing tobacco taxes protects public health by reducing smoking and lowering health spending,” said John R. Seffrin, chief executive officer of the American Cancer Society Cancer Action Network (ACS CAN). “We encourage more states to follow Massachusetts’ lead and consider a tobacco tax increase as a reliable means to reduce health care costs and invest in critical health programs. It’s a win for states every way you look at it.”
ACS CAN estimates that the $1 increase will save an estimated 15,500 lives in Massachusetts and keep approximately 27,200 kids from becoming addicted adult smokers. In addition, it is expected that nearly 25,000 adult smokers would quit.
New annual revenue from increasing the cigarette tax is expected to be $118.5 million. Combined with an estimated $994.89 million in long-term health care cost savings from the cigarette tax, the increase will have a tremendous positive impact on both the state budget and health care consumers in Massachusetts.
The Massachusetts legislature also increased the excise tax on other tobacco products, such as cigars and smokeless alternatives. The current rate in the state is 90 percent of the wholesale price and the new law would raise the rate to 210 percent of the wholesale price – making it the highest OTP tax in the country. As cigarette taxes increase, tobacco companies use deceptive marketing to lure youth to lower-priced alternatives such as cigars, snus and newer products such as dissolvable orbs. Ensuring that other tobacco products are taxed at a rate at least as high as cigarettes helps curb youth usage.
Raising tobacco prices through regular and significant tax rate increases encourages tobacco users to quit or cut down and prevents kids from starting to smoke. Research has consistently shown that every 10 percent increase in the price of cigarettes reduces youth smoking by 6.5 percent and overall cigarette consumption by about 4 percent. The $1 increase in Massachusetts would result in a 9 percent reduction in youth smoking in the state.
The current state cigarette tax in Massachusetts is $2.51 per pack, which is 9th among all states and the District of Columbia. The national average state cigarette excise tax is currently $1.48 per pack and will increase to $1.53 once both the Massachusetts tax increase takes effect and another recently passed $1.60 increase in Minnesota takes effect on July 1. The health costs and reduced productivity costs attributed to smoking are $10.47 per pack of cigarettes. In Massachusetts, the smoking-caused health care costs in the state total $19.49 per pack.
In the past 10 years, only three states – California, Missouri and North Dakota – have not raised their cigarette tax. State cigarette excise taxes vary widely, ranging from a high of $4.35 in New York to a low of $0.17 in Missouri. Currently, 14 states, the District of Columbia, Puerto Rico and Guam have cigarette taxes of $2 or more per pack. That number will increase to 15 when Minnesota’s recent tax increase goes into effect.
“Thirty-five people a day die from cancer in Massachusetts, and nearly 30 percent of those deaths are directly attributable to tobacco use. That loss of life is tragic – and it’s preventable,” said Chris Hansen, president of ACS CAN, the advocacy affiliate of the American Cancer Society. “Raising tobacco taxes is the most effective way to reduce smoking rates and to help prevent kids from starting the deadly habit. The bottom line for Massachusetts is that less smoking will mean less cancer and lower health care costs.”
While ACS CAN applauds the state’s move to increase the taxes on cigarettes and other tobacco products, it is disappointing that the Massachusetts legislature missed an opportunity during the budget debate to increase funding for the state’s tobacco prevention fund.
The use of tobacco products remains the nation’s number one cause of preventable death, killing an estimated 443,000 Americans and costing $193 billion in health care and productivity losses each year.
ACS CAN, the nonprofit, nonpartisan advocacy affiliate of the American Cancer Society, supports evidence-based policy and legislative solutions designed to eliminate cancer as a major health problem. ACS CAN works to encourage elected officials and candidates to make cancer a top national priority. ACS CAN gives ordinary people extraordinary power to fight cancer with the training and tools they need to make their voices heard. For more information, visit www.acscan.org.
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