Why a $1 Per Pack Cigarette Tax Increase

It is only with a $1 increase that we reach the maximum health and financial benefits of a cigarette tax. Numerous studies, including those conducted by Big Tobacco, have found that for every 10 percent increase in the price of cigarettes there is a 3 percent to 5 percent reduction in overall cigarette consumption.

Tax increases of less than 10% of the average state pack price do not produce significant public health benefits or cost savings because the cigarette companies can easily offset the beneficial impact of such small increases with temporary price cuts, coupons, and other promotional discounting.  Splitting a tax rate increase into separate, smaller increases in successive years will similarly diminish if not destroy the public health benefits and related cost savings.

The average price of cigarettes in Mississippi is $3.55. If the Legislature increases the excise tax by only 24 cents, that would increase the average price to $3.79—only a 6 percent increase. That would have zero effect on consumption.

A $1 per pack cigarette tax increase would lead to:

• 20% percent reduction in youth smoking
• 23,400 adults to quit smoking
• $174 million in new revenue
• $1 billion in long-term health-care savings due to drops in youth and adult smoking

RESPONSES TO MISLEADING AND INACCURATE ARGUMENTS AGAINST A $1 CIGARETTE TAX IN MISSISSIPPI

RAISING STATE CIGARETTE TAXES ALWAYS INCREASES STATE REVENUES (AND ALWAYS REDUCES SMOKING)

MHAP Cigarette Tax/Medicaid Public Opinion Survey- Nov. 2008
The data for this poll was collected in mid-November of 2008 by the Survey Research Laboratory of the Social Science Research Center at Mississippi State University.