Do Big Cigarette Taxes Hurt Big Tobacco?

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Pointing to the fact that tobacco-related illnesses kill 5,100 people each year in Minnesota, more than alcohol, homicides, car accidents, AIDS, illegal drugs and suicide combined, the state’s governor Mark Dayton is seeking to raise the state cigarette tax to $2.83 per pack, an increase of 95 cents.

His efforts are being mirrored in state legislatures across the country, with higher cigarette taxes appearing on the docket in many states with traditionally high numbers of smokers. Lawmakers in Alabama, Florida, Kentucky, Mississippi, Missouri, Oklahoma, and Oregon have all proposed bills that will increase taxes levied on tobacco products by rates ranging from 10 cents per pack to 64.25 cents per pack.

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Dayton was initially reluctant to pass the regressive tax, as it would it would affect low-income earners more harshly than higher earners. But, as he told the San Francisco Chronicle, the Governor ultimately decided in favor of the measure because increasing cigarette taxes has been proven to dissuade people from smoking. Statistics indicate that the federal tobacco tax bill, signed into law by President Barack Obama less than month into his first term, helped lower smoking rates. According to USA Today, the Centers for Disease Control and Prevention reported that 3 million fewer people smoked in 2010 than in 2009 as a result of the the 62-cent tax increase…

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