Federal Cigarette Tax Hike Has Many on the Fence

On April 1, 2009 the newest Federal cigarette tax increase goes into effect. It will raise the price of cigarettes approximately 62 cents more per pack in addition to the 39 cents already being taxed on each pack. The Federal Government tells us that the increased revenue will go towards healthcare for low income families.

Many are on the fence when asked what they are going to do. Many have already unsuccessfully tried to quit smoking when prices when higher in the past. "I've tried to quit several times in the past," said Patricia Muller of West Texas, "both for health reasons and to save money. But was unsuccessful, it is a very difficult habit to break."

WDIO in Michigan reported that people were driving upwards of fifty miles to purchase tobacco and cigarettes before the tax hike on April 1. "Customers are buying in bulk before the prices go up. Some have purchased as much as 18 pounds at a time."

Unfortunately, it seems that the additional cost will not stop them from smoking. At five dollars or more a pack, a pack-a-day smoker will spend more than $150 a month for cigarettes. Many people that are on fixed incomes or low incomes and smoke have chosen the "roll your own" tobacco. According to tobaccoissues.com, the tax rates on a one pound bag of "roll your own" tobacco will go from $1.10 to $24.78!

One would hope that the Federal Government's intentions were to discourage smokers from continuing their habit in some long term goal of creating a healthier society that would eventually lower health insurance costs. However, none of us are really that naïve. Doubling and tripling the tax revenue on cigarettes will definitely increase the flow of money to Washington...at the smokers and their family's cost.

Smokers are already paying more for health care and life insurance. The high cost of smoking will only contribute to low income and fixed income family's already growing problem of "making ends meet" each month.

A use tax is not a new concept. For non-smokers, it even sounds fair. Many claim they will try to quit because of the high cost. But unfortunately, less than 8-percent will be successful. Typically, 5-16 percent of people are able to quit smoking for a period of six months without a program or medication according to Cravings B Gone. I'm sure the government has calculated this into their new revenue stream.

Whether you will quit or not will be your choice. The success rate for quitting increases to 25 percent and better if you are on one of the many programs available. By the way, most health care insurance policies do not cover these programs or drugs and their more expensive than cigarettes in the short run. Because of that, I fear most will continue to smoke.