Ashley Laguaite sat outside Middleton Library on Monday afternoon puffing on a Camel cigarette, which only cost her $4.30 a pack. But starting Wednesday, she will be forced to dig deeper into her pockets before enjoying a drag.A federal tax rate will raise the prices of tobacco, cigarettes, cigars, snuff and chewing tobacco April 1, making it the largest tobacco tax boost ever.A 62-cent increase per pack will be placed on all tobacco products, adding up to $1.01 in federal tax. The current tax is only 39 cents a pack.”I try not to think about [the tax],” said Laguaite, history senior. “My friends and I have been taking turns buying packs.”The new federal tax will fund the State Children’s Health Insurance Program, which will give states matching funds for family health insurance. President Obama signed the $32-billion law in February.More than 23 percent of Louisiana adults smoke, according to the Centers for Disease Control and Prevention. And a state resident who smokes a pack a day can expect to spend nearly $2,500 annually after the tax increase.But in addition to the federal tax, one Louisiana lawmaker wants smokers to pay an additional $1 per pack of cigarettes, which would raise the per-pack state tax to $1.36.State Representative Karen Peterson, D-New Orleans, said the tax would create $209 million in annual revenue and help reduce the state’s budget deficit.Peterson didn’t return phone calls for comment before press time.Lawmakers will consider the proposal in the legislative session that starts April 27. But Gov. Bobby Jindal told the Associated Press two weeks ago that he would veto the tax increase because he opposes any tax increases during the recession.The federal tax increase alone may cause smokers to begin changing their smoking habits.An estimated 20 percent of Americans smoke cigarettes, according to the CDC. And studies show cigarette tax increases prompt smokers to quit, according to the Campaign for Tobacco Free Kids, an anti-smoking group.For every 10 percent increase in the cost of cigarettes, smoking rates decline 3 percent to 5 percent, according to the group.Mark Dupont, history freshman, spends $4.89 on one pack of Marlboro cigarettes every three days, but said he will quit after the tax goes into effect Wednesday.”I’ve been planning on quitting, but this [tax] is the last straw,” Dupont said.Joe Mullen, manager of Southdowns Discount Liquor and Cigarettes on Perkins Road, said he’s unsure how the tobacco tax will affect his business in the long run.”Cigarettes are in our name, so they’re pretty important [to our business],” Mullen said. “We can kind of afford it, but there’s going to be this threshold where we could start losing money. Say 30 percent of our customers stop smoking, it’s going to hurt us, but 15 percent isn’t that big of deal.”Cigarette retailers saw a price increase earlier this month when the manufactures were forced to raise prices because of production and shipping costs, he said.Mullen said more smokers will likely try to quit smoking, but he doubts they will be successful.”People are asking ‘Why did they have to charge us?’ and ‘Why should I have to pay for these businesses failing just because I smoke?'” Mullen said. “There’re a lot of people who just can’t afford it. They can only afford a certain amount of cartons per month, and now it’s not in their budget. They have to smoke half the amount they’re used to.”Jarvis Green, manager and owner of Green’s Purple and Gold on Nicholson Drive, said cigarette sales are important to his business, but he doesn’t expect the tax increase to have a major effect on business.”It’s not going to kill our sales,” Green said. “People aren’t going to stop smoking. When gas went up, people still drove. After they get a couple of drinks, they will be here to get cigarettes.”Green said he expects people to buy cheaper cigarettes in response to the tax. He said Camel cigarettes are cheaper, and he’s already noticed an increase in demand for that brand since the first price increase.A pack of Camels currently costs $4.47 plus tax, he said, and one pack will cost about $7 starting Wednesday. But smokers in some states are preparing to pay nearly $9 per pack.”It’s a lot, but it’s not as bad as people think,” Green said. “It’s just not a norm to us right now.”—-Contact Leslie Presnall at [email protected]
Tobacco tax may put strain on smokers
March 30, 2009