Sue Ducat
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Melissa Blair
Robert Wood Johnson Foundation
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Tobacco Taxes

A new policy brief from Health Affairs and the Robert Wood Johnson Foundation examines tobacco taxes, one of the tactics public health officials use to try to reduce smoking. The rule of thumb in the United States is that a 10 percent price increase on a pack of cigarettes results in anywhere from a 2.5 percent to a 5.0 percent decline in smoking, with the impact often more pronounced on teens. To curb smoking and raise revenue, the fifty states and the District of Columbia tax cigarettes, at rates ranging from 17 cents a pack in Missouri to $4.35 in New York, with counties and cities sometimes adding their own taxes. This brief provides a discussion on the methodology and public health benefits of governments imposing taxes on tobacco products.

Topics covered by this policy brief include:

  • What’s the background and the policy? The 1964 Surgeon General’s report, stating that cigarette smoking was “causally related” to lung cancer in men, brought about subsequent studies, which identified a direct connection between higher prices and lowered tobacco use, bringing about progressively higher taxes for tobacco products. While taxing tobacco had its origins in prerevolutionary America, the brief details the more recent history of tobacco taxes, the different types of taxes, and details a case study of the city of Chicago, now with the most heavily taxed cigarettes in the country, with the tax burden alone amounting to $7.17 a pack.

  • What’s the debate? US smoking rates for adults eighteen and older continue to decline. While tobacco taxes have helped bring about those results, the brief notes some of the problems with higher excise taxes and ways that consumers and the tobacco industry can mute their impact. The brief cites the Federal Trade Commission’s contention that some 85 percent of tobacco industry promotional efforts go toward offering price discounts. Despite these discounts, many—including those in the tobacco industry—have pointed out that tobacco taxes are regressive, placing a higher financial burden on poorer Americans, who also smoke at higher rates than better-off Americans.

  • What’s next? Three states are holding ballot initiatives on tobacco tax increases this year. And, although many states have considered taxing e-cigarettes, only six have done so. Tobacco taxes remain one of the few ways to raise revenue that does not spark massive opposition.

About Health Policy Briefs

Health Policy Briefs are aimed at policy makers, congressional staffers, and others needing short, jargon-free explanations of health policy basics. The briefs, which are reviewed by experts in the field, include competing arguments on policy proposals and the relevant research supporting each perspective.

Previous Health Policy Briefs have addressed:

  • Telehealth Parity Laws. Ongoing reforms are expanding the landscape of telehealth in the US health care system, but challenges remain.

  • Regulation of Health Plan Provider Networks. Narrow networks have changed considerably under the Affordable Care Act, but the trajectory of regulation remains unclear.

  • Off-Label Drug Promotion. Drug companies are largely prohibited from promoting a drug for uses that have not been approved by the Food and Drug Administration.

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About Health Affairs

Health Affairs is the leading journal at the intersection of health, health care, and policy. Published by Project HOPE, the peer-reviewed journal appears each month in print and online, with additional Web First papers and health policy briefs published regularly at Read daily perspectives on Health Affairs Blog and customize the content you want to see in Health Affairs Alerts.

About the Robert Wood Johnson Foundation

For more than 40 years the Robert Wood Johnson Foundation has worked to improve health and health care. We are striving to build a national Culture of Health that will enable all to live longer, healthier lives now and for generations to come. For more information, visit Follow the Foundation on Twitter at or on Facebook at