Tobacco Use Prevention and Cessation

Raising the Cigarette Excise Tax in North Carolina

During the 2005 legislative session, the legislature passed and Governor Mike Easley signed a 25-cent increase in the state's cigarette excise tax. The tax increase went into effect September 2005, which will bring the total tax to 30 cents a pack. An additional 5-cent increase will take effect in July of 2006. This makes North Carolina cigarette tax tied with Virginia and Kentucky for the second highest among the tobacco states and will help reduce youth smoking rates as well as provide much needed revenue to the state.

What's the big deal about smoking?

Tobacco use costs NC lives and money:

• 20.3% of NC high school students smoke
• 207,500 kids alive in NC today will ultimately die of smoking if current trends persist
• 17,300 kids (under 18) become new daily smokers each year.
• 23.2% of adults smoke.
• 11,900 adults in NC die each year from smoking.
• NC incurs $2.62 billion each year in health care costs directly caused by tobacco use.
• North Carolina's cigarette tax is $.30 per pack
   

What happens if we raise the tax?

Raising the cigarette tax by just $.50 results in:

• $373.8 million in new cigarette tax revenue
• $8.6 million in new sales tax revenue
• 70,500 kids alive today will not become smokers
• 49,100 adult smokers in NC will quit
• The lives of 10,800 adult smokers will be saved.
• 22,500 kids alive today will be saved from smoking-caused premature death
• $27.6 million in health care costs due to smoking-affected pregnancies and births, heart attacks, and strokes will be saved over the next five years.
• $1.25 billion in long-term health care savings

What about NC's farmers?

Cigarette Tax Increases and Tobacco Farmers/Quota Holders:

• Only a small percentage of tobacco grown in NC is actually smoked in NC. (NC smokers account for only 1.9% of the demand for tobacco grown anywhere in the U.S.)
• An increase of $.50 in the cigarette tax would only reduce demand for tobacco grown anywhere in the U.S. by between .11% and .13%.

Won't this hurt the poor?

Cigarette Tax Increases and Low-Income Smokers and Families:

• Low-income smokers are more likely to quit as a result of increased cigarette taxes.
• State cigarette taxes shift overall tobacco-tax burden to higher-income smokers.
• Cigarette taxes improve the overall health of low-income smokers, significantly reducing their overall health costs.
• Low-income voters strongly support cigarette tax increases (67% of voters with an annual household income less than $25,000 support an increase).

What about taxing tobacco and internet cigarette sales?

You may hear the argument, backed by the Tobacco Industry, that raising cigarette taxes promotes increases in online cigarette sales and the illegal smuggling of cigarettes across state lines. However, research shows that these potential negatives are far outweighed by the certain positive result of significant excise tax increases: fewer people smoking fewer cigarettes. It is unlikely that internet cigarette sales will ever make up more than 15% of total cigarette sales. An illegal smuggling? The Federal Government has already convicted a smuggling ring suspected on links to Al Quaeda for smuggling cigarettes out of North Carolina. Raising our excise tax would push groups like this one out of our state!

Resources on the Web

	The Campaign for Tobacco-Free Kids offers scientifically sound research and resources for decreasing tobacco use and its negative health effects. Get state-, federal-, and international-level information in easy to use formats!
	This link accesses the national American Lung Association web site which includes several comprehensive reports on policies related to tobacco control - including increasing excise taxes. Join the ALA Action Network to be an online advocate!
	The Centers for Disease Control and Prevention offers one of the largest compilations of tobacco control research and resources, including information about excise tax increases.