Where's the tipping point on state cigarette tax?

When in doubt, sin taxes win out. That’s precisely where Pennsylvania legislators turned earlier this month when they approved a revenue package that relies heavily on a $1-a-pack increase in the $1.60 cigarette tax and a significant expansion of casino gambling, although all of the wrinkles of the latter have not yet been worked out.

The question always remains: At what point do the politicians raise a tax one time too many? With a $2.60-a-pack state tax to be in place Aug. 1, when the new tax increase takes effect, are smokers at the point where they will (1) quit, (2) cut back or (3) break the law by buying black market smokes from lower-taxing states or illegally bring them into Pennsylvania themselves when they visit some of these states?

Missouri has the lowest tax at just 17 cents a pack, while Virginia is next lowest at 30 cents and Georgia at 37 cents. Most of the southern states, where tobacco is grown, are among the 10 lowest in the nation.

Then there is always the looming question of whether the federal government will one day ban cigarettes, cigars, smokeless tobacco and probably even e-cigarettes and vapes. If that happens, the whole ballgame goes up in smoke.

What we are seeing now are smokers stocking up before the increase. I checked out prices at several Carbon County convenience stores and found that some of the most popular brands, such as Marlboro, sell for between $6 and $8 a pack. With the increase, this will put the per-pack price between $7 and $9 a pack. Naturally, some stores sell below these prices, and companies run occasional specials. Smokers also get a price break if they buy a carton (10 packs) at a time.

To give you an idea of how far we have come in cigarette taxing, when I quit smoking 50 years ago this year, a pack cost 25 cents, including tax.

With this increase, Pennsylvania will have the 10th highest cigarette tax in the land, still a dime-a-pack lower than New Jersey’s. You will want to steer clear of Philadelphia, which already has a $2-a-pack surcharge to help fund the city’s destitute public schools. This will make Philly’s tax $4.60 a pack, third highest in the nation behind just New York City’s $5.85 and Chicago’s even higher $6.16.

The new legislation also taxes pipe tobacco, smokeless tobacco (snuff) and roll-your-own tobacco at 55 cents an ounce. This means Pennsylvania will have caught up with the other 49 states since it is the last to tax these products. Why not before? Ever hear of strong lobbyists?

E-cigarettes and nicotine with vaping liquid was not left out; the legislation adds a 40 percent wholesale tax to these products.

Legislators are never totally honest about why they lean so heavily on sin taxes when the will is not there to increase broad-based taxes, such as the income and sales taxes. This was especially true in this election year when all 203 state House of Representatives and 25 of the 50 state senators are standing for re-election.

They say they are supporting the increase to help eradicate smoking, which they say is a dangerous, even deadly, habit. Maybe, but let’s not forget that they need the money that the smoking tax brings in to balance the state budget.

If smokers quit en masse, do you think legislative leaders will be high-fiving each other? Maybe for the cameras, but they also will be wringing their hands, wondering where the lost revenue will be made up.

Don’t get me wrong; every time there is an increase in the cigarette tax, some smokers will quit. Higher taxes are cited by health industry experts as a reason why smoking rates and the government’s high-profile awareness campaigns about the dangers of smoking have dropped the percentage of state smokers. About 20 percent of Pennsylvania adults smoked in 2014, the last year for which figures are available, which is higher than the national rate. In Philadelphia, nearly 25 percent of the adults smoke, making it one of the highest incidence of smoking among American cities.

The Centers for Disease Control and Prevention estimated that 16.8 percent, or 40 million, U.S. adults were smokers in 2014. About three in four smoked every day; the rest smoked some days.

The CDC reports that 26 percent of those below the poverty level smoke, while just 15 percent at or above the poverty line do. This means that those who can least afford it smoke the most.

In addition, the CDC report says, more men smoke (19 percent) than women (15 percent), and 20 percent of those in the 25-44 age group smoke (the most) while 8.5 percent of those 65 and older smoke (the least).

The Campaign for Tobacco-Free Kids came out with a news release a few days ago praising Gov. Tom Wolf and the state General Assembly for approving the tax increases. The group did say, however, that the politicians missed an opportunity by excluding taxes on small cigars. Remember those lobbyists I mentioned earlier?

“The evidence is clear,” said Matthew L. Myers, president of the group, “that increasing the cigarette tax is one of the most effective ways to reduce smoking, especially among kids.” He said that national studies show that every 10 percent increase in the price of cigarettes reduces youth smoking by about 7 percent and overall cigarette consumption by about 4 percent.

As a result, Myers predicts that Pennsylvanians can expect the tax increase to:

• Prevent more than 48,100 Pennsylvania children from becoming smokers

• Encourage more than 65,600 current adult smokers to quit

• Save 32,200 Pennsylvanians from premature, smoking-caused deaths

• Save $2.19 billion in future health care costs.

Tobacco use is the leading preventable cause of death and disease in Pennsylvania, claiming 22,000 lives each year and costing the state more than $6.3 billion annually in health care bills. While Pennsylvania has made progress in reducing youth smoking, 12.9 percent of high school students still smoke and 9,200 kids become new regular smokers every year.

Addicted smokers who have tried every known cure will tell you how difficult it is to break the nicotine habit. Taxing smokers into quitting is working in a limited way, but we still have a long way to go.

By Bruce Frassinelli | tneditor@tnonline.com