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Tobacco Taxation

Fact Sheet

  • Substantial scientific evidence shows that higher cigarette prices result in lower overall cigarette consumption. Most studies indicate that a 10% increase in price will reduce overall cigarette consumption by 3% to 5%.
     
  • Youth, minorities, and low-income smokers are two to three times more likely to quit or smoke less than other smokers in response to price increases.
     
  • Increases in cigarette excise taxes are an effective policy tool in deterring smoking initiation among youth, prompting smoking cessation among adults, and reducing the average cigarette consumption among continuing smokers.
     
  • Despite the proven effects of increasing both the price of cigarettes and tobacco excise taxes, the average price and excise tax on cigarettes in the United States is well below those of most other industrialized nations.
     
  • Higher cigarette prices will not simply reduce average cigarette consumption but also will reduce overall smoking prevalence. Higher prices will result in more smokers deciding to quit and fewer young people opting to begin smoking.
     
  • Studies of smokeless tobacco products suggest that increasing their prices would reduce the prevalence of smokeless tobacco use as well.
     
  • Taxes on smokeless tobacco products are much lower than taxes on cigarettes, particularly at the federal level. Research suggests that increases in cigarette excise taxes, while reducing cigarette smoking, may have contributed to greater use of smokeless tobacco products. Some public health advocates and others have therefore called for the equalization of taxes on tobacco.
     
  • Healthy People 2010 calls for state and federal taxes to increase to an average of $2 for both cigarettes and smokeless tobacco products by the year 2010.
     
  • The importance of tobacco to the U.S. economy has been overstated. Judicious policies combined with higher tobacco taxes and stronger prevention policies can help foster economic diversification in tobacco-producing areas.

Global Cigarette Prices and Taxes in U.S.Dollars,1999

Country Tax as % Tax Price Tax Price
UK 86% 5.64 6.56
Denmark 82% 4.47 5.47
Portugal 80% 1.88 2.37
Finland 76% 3.82 5.02
France 76% 3.03 4.01
Canada 75% 3.35 4.48
Belgium 75% 2.65 3.55
Italy 75% 1.94 2.60
Austria 74% 2.33 3.15
Greece 73% 1.75 2.41
Spain 73% 14.19 1.63
Netherlands 72% 2.37 3.29
Germany 71% 2.58 3.65
Sweden 70% 3.70 5.27
Ireland 60% 3.26 5.44
Canada 55% 1.41 2.55
US3 41% 1.92 4.65
US4 11% 0.34 3.04

Source: Non-Smokers’ Rights Association web site. *

1:(Highest-New Foundland)
2:(Lowest-Ontario)
3:(Highest-Alaska)
4:(Lowest-Kentucky)

*  Links to non-Federal organizations are provided solely as a service to our users. Links do not constitute an endorsement of any organization by CDC or the Federal Government, and none should be inferred. The CDC is not responsible for the content of the individual organization Web pages found at this link.


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This page last reviewed May 14, 2004

United States Department of Health and Human Services
Centers for Disease Control and Prevention
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