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Letter: Tobacco taxes should be raised

By Jay Taylor from Durbin, N.D.

Hey! I have a great idea! Let’s raise a tax on something,” said no North Dakota legislator ever.

Wow! Raising a tax on anything, with North Dakota being so flush from oil money, just doesn’t make any sense at all.

And yet, taxes (or fees if you want a more politically correct term) do continue to inch up here and there.

During the 2013 legislative session, North Dakota lawmakers passed a bill that increased fees for many hunting and fishing licenses.

A tax is generally imposed to gain funds to pay for specific services or products: “It is a compulsory contribution to state revenue, levied by the government on workers’ income and business profits or added to the cost of some goods, services, and transactions.”

As said, to raise a tax in North Dakota today just doesn’t seem to make any sense, unless it’s a tax to protect the health of our residents, prevent disease and thwart kids from starting a path of extremely unhealthy behavior.

OK, I’ve beat around the bush long enough. I have read a lot about the idea of increasing the tobacco tax in North Dakota, and I am totally in favor of such an action. Here’s why:

The tobacco tax in North Dakota is one of the lowest in the nation (we are 46th at 44 cents per pack of 20 cigarettes), the lower-than-us states include: Missouri at 17 cents; Louisiana at 36 cents; Georgia at 37 cents and Alabama at 42 cents.

Our tobacco tax hasn’t increased since 1993.

The effects of North Dakotans’ tobacco use also affects the wallets of those who don’t use tobacco. North Dakota’s annual health care costs directly caused by smoking are $326 million. The portion covered by state Medicaid is $47 million.

But the most important reason is that a higher tobacco tax encourages people to quit and discourages younger folks from starting. According to the Tobacco Free Kids organization, “tobacco tax increases are one of the most effective ways to reduce smoking and other tobacco use, especially among kids. Every 10 percent increase in cigarette prices reduces youth smoking by about seven percent and total cigarette consumption by about four percent.”

For all the work being done by public health and health advocacy organizations, raising the tobacco tax is win-win.

I think it’s about time the North Dakota legislators started having a serious talk about this rather serious idea.

http://www.westfargopioneer.com/content/letter-tobacco-taxes-should-be-raised

Letter: Tobacco taxes should be raised

“Hey! I have a great idea! Let’s raise a tax on something,” said no North Dakota legislator ever.

Wow! Raising a tax on anything, with North Dakota being so flush from oil money, just doesn’t make any sense at all.

And yet, taxes (or fees if you want a more politically correct term) do continue to inch up here and there.

During the 2013 legislative session, North Dakota lawmakers passed a bill that increased fees for many hunting and fishing licenses.

A tax is generally imposed to gain funds to pay for specific services or products: “It is a compulsory contribution to state revenue, levied by the government on workers’ income and business profits or added to the cost of some goods, services, and transactions.”

As said, to raise a tax in North Dakota today just doesn’t seem to make any sense, unless it’s a tax to protect the health of our residents, prevent disease and thwart kids from starting a path of extremely unhealthy behavior.

OK, I’ve beat around the bush long enough. I have read a lot about the idea of increasing the tobacco tax in North Dakota, and I am totally in favor of such an action. Here’s why:

The tobacco tax in North Dakota is one of the lowest in the nation (we are 46th at 44 cents per pack of 20 cigarettes), the lower-than-us states include: Missouri at 17 cents; Louisiana at 36 cents; Georgia at 37 cents and Alabama at 42 cents.

Our tobacco tax hasn’t increased since 1993.

The effects of North Dakotans’ tobacco use also affects the wallets of those who don’t use tobacco. North Dakota’s annual health care costs directly caused by smoking are $326 million. The portion covered by state Medicaid is $47 million.

But the most important reason is that a higher tobacco tax encourages people to quit and discourages younger folks from starting. According to the Tobacco Free Kids organization, “tobacco tax increases are one of the most effective ways to reduce smoking and other tobacco use, especially among kids. Every 10 percent increase in cigarette prices reduces youth smoking by about seven percent and total cigarette consumption by about four percent.”

For all the work being done by public health and health advocacy organizations, raising the tobacco tax is win-win.

I think it’s about time the North Dakota legislators started having a serious talk about this rather serious idea.

http://www.westfargopioneer.com/content/letter-tobacco-taxes-should-be-raised

The Post's View: Raising all federal tobacco taxes can stop tax avoidance

By Editorial Board, Washington Post

ENACT A LAW, and companies will find loopholes to exploit. That was the fear which drove lawmakers in 2009 to raise cigarette taxes together with taxes for roll-your-own tobacco and small cigars, both easy substitutes for cigarettes. To prevent manufacturers from shifting toward lesser-taxed alternatives, Congress equalized taxes between all three products — hiking the existing roll-your-own tobacco tax by over 24 times and small cigars by over 27 times.

These products have plunged in sales since 2009. But tobacco manufacturers, unfazed in their quest to fatten their purses, found a new loophole. Unlike these three highly taxed tobacco products, post-2009 taxes on pipe tobacco and large cigars are relatively low. All it took to shift consumers to those products was relabeling roll-your-own tobacco as pipe tobacco, and slightly adding weight to qualify small cigars as large cigars. As evidence from a recent Senate finance committee hearing shows, the popularity of pipe tobacco and large cigars have exploded.

That market shift has cost the federal government up to $3.7 billion in forgone revenue. Even worse, it’s hampered the effect of high tobacco prices on preventing teen smoking.

The first instinct might be to blame the Alcohol and Tobacco Tax and Trade Bureau, which has yet to sharpen definitions of many of these products. While action by the bureau could help close the loopholes, it faces a daunting task. For example, where should it draw the line between roll-your-own and pipe tobacco? In many cases, “it is difficult to establish objective physical standards for differentiating between the two products,” the bureau’s chief said in his testimony. Sometimes the difference is virtually nothing at all.

So forget rewriting definitions. The foolproof solution is for Congress to pass a law equalizing all tobacco taxes. That would raise taxes for pipe tobacco and large cigars to the same level as cigarette taxes, preventing any market shift. A bill introduced by Sen. Richard Durbin (D-Ill.) in 2013, still stuck in committee, would accomplish this task.

Better yet, Congress should hike all tobacco taxes — not just the lower ones — up to higher and equal levels. State taxes vary widely, from $4.35 per cigarette pack in New York to $0.17 per pack in Missouri, making smuggling a big problem for law enforcement. The current cigarette and small cigar federal tax is a meager $1.01 per pack of 20; a higher federal tax would diminish the effect of inconsistency between states and allow for a more uniform response.

These are two common-sense solutions to close tobacco tax loopholes. But the problem of tobacco manufacturers exploiting definitions has another dimension. The Food and Drug Administration, the other arm of the U.S. public health response, has proposed a long-awaited rule to expand its regulatory authority over “all” tobacco products. But premium cigars may be exempted from these regulations, potentially allowing manufacturers to “sweep other cigar products under its umbrella,” as the FDA has admitted before. This proposed exemption, as demonstrated by the tax avoidance case, is a disaster waiting to happen.

http://www.washingtonpost.com/opinions/raising-all-federal-tobacco-taxes-can-stop-tax-avoidance/2014/08/02/4b542a76-180d-11e4-9349-84d4a85be981_story.html

Tobacco tax law reportedly cost U.S. billions in revenue

By Reuters Media
WASHINGTON – A 2009 law that raised federal taxes to discourage smoking cost the U.S. government billions of dollars in lost revenue as manufacturers relabeled products and consumers shifted to cheaper pipe tobacco and large cigars, the U.S. Government Accountability Office said in a report released on Tuesday.

The GAO estimated $2.6 billion to $3.7 billion in lost revenue from April 2009 to February 2014 as manufacturers exploited loopholes in the Children’s Health Insurance Program Reauthorization Act which raised taxes for smoking-tobacco products.

“Each of the three tobacco manufacturers that agreed to speak with us explained that their companies switched from selling higher-taxed roll-your-own tobacco to lower-taxed pipe tobacco to stay competitive,” the congressional watchdog agency said in the report, which was the focus of a Senate hearing on Tuesday.

At the hearing, Liggett Vector Brands LLC Chief Executive Ronald Bernstein urged lawmakers to take action against abuses by manufacturers.

He held up two seemingly identical, but differently labeled non-Liggett bags of tobacco. Showing a third sample, he pointed out that a label saying “all-natural pipe tobacco” covered up a statement that the bag “makes approximately 500 cigarettes.”

“Everyone knows this is cigarette tobacco,” Bernstein said. “The manufacturer knows. The consumer knows. And I know. I know because I tried smoking it in a pipe and it was not a pleasant experience.”

Some manufacturers also add a few ounces of tobacco to small cigars so they qualify as the larger product. Others even mix in clay or kitty litter to increase the weight, Michael Tynan, policy officer at the Oregon Public Health Division, told the hearing.

The GAO said the tobacco market shifted accordingly. Yearly sales of pipe tobacco rose more than eight-fold from fiscal 2008 to 2013, while sales of roll-your-own tobacco declined almost six-fold.

Over the same period, large cigar sales doubled, while small cigar sales dropped to just 700 million from 5.7 billion.

Senate Finance Committee Chairman Ron Wyden, who convened the hearing, criticized the Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB), which is responsible for collecting tobacco taxes and cracking down on evasion, for “footdragging.”

In recent years, the agency has pushed to apply “advanced investigative techniques to uncover illicit trade and fraudulent activity,” including deploying about 125 auditors and investigators, the TTB wrote in its Senatetestimony.

Responding to a push to better differentiate between roll-your-own and pipe tobacco, the agency published an “advanced notice of proposed rule making” in 2010 and 2011. But no rule had yet been issued, the GAO wrote.

In 2015, the TTB will issue a proposed regulation cracking down on the illegal activities, TTB Administrator John Manfreda said on Tuesday.

But Wyden, an Oregon Democrat, said it was not enough. He said the problem reminded him of “the old marquee at the movie house that says: ‘Coming soon,’ and it never gets there.”

http://www.inforum.com/content/tobacco-tax-law-reportedly-cost-us-billions-revenue

Taxes on cigarettes help reduce number of smokers

By Matthew L. Myers, president of the Campaign for Tobacco-Free Kids
The Hill
Science and experience have demonstrated conclusively that cigarette tax increases are highly effective at reducing smoking, especially among kids. Thus, the conclusions in a Gallup poll The Hill recently wrote about (“High cigarette prices aren’t stopping smokers,” July 18) are inconsistent with what happens in the real world every time cigarette taxes are increased.

The most recent surgeon general’s report on tobacco concludes that “raising prices on cigarettes is one of the most effective tobacco control interventions.” The report called for additional cigarette tax increases “to prevent youth from starting smoking and encouraging smokers to quit.” The Congressional Budget Office has also reviewed the evidence and concluded that an increase in the federal cigarette tax would significantly reduce the number of adult smokers.

In the year after a 62-cent increase in the federal cigarette tax in 2009, cigarette sales declined by a historic 11.1 percent. Adult and youth smoking rates also declined. “This single legislative act — increasing the price of cigarettes — is projected to have reduced the number of middle and high school students who smoke by over 220,000 and the number using smokeless tobacco products by over 135,000,” the surgeon general’s report noted.

Even the poll The Hill wrote about reported that more than a quarter of adult smokers surveyed said they smoked less due to tax increases. As there are 42 million smokers in the United States, this translates into millions of smokers whose behavior is affected by cigarette tax increases. And this survey of current smokers would not have included former smokers who have already quit due to increased tobacco taxes.
Tobacco tax increases don’t have to cause every smoker or even a majority of smokers to quit or cut back in order to have a big impact on public health. As the scientific evidence and even the new Gallup poll show, such tax increases will impact the behavior of large numbers of smokers, saving many from a premature death.
From Matthew L. Myers, president of the Campaign for Tobacco-Free Kids, Washington, D.C.

Read more: http://thehill.com/opinion/letters/213571-taxes-on-cigarettes-help-reduce-number-of-smokers#ixzz38sdK91IE
Follow us: @thehill on Twitter | TheHill on Facebook

Report: Smoking bans, cigarette taxes linked to lower suicide rates

SALT LAKE CITY — Utah mental health and public health officials say a new report that links stronger anti-smoking initiatives to lower suicide rates suggests an added benefit of states’ prevention and cessation efforts.

The report, published in the journal Nicotine & Tobacco Research, found that public health interventions, such as raising cigarette taxes and imposing indoor smoking bans, could reduce risk of suicide by as much as 15 percent.

Janae Duncan, coordinator of the Utah Health Department’s Tobacco Prevention and Control Program, said Utah’s Indoor Clean Air Act “is really strong.”

While the state’s rate of adult smoking of 10.6 percent is the lowest in the nation, Utah’s tobacco taxes are relatively low at $1.70 per pack of cigarettes, Duncan said. Utah’s rate is higher than the national average but well below the rates of some East Coast states such as New York, which imposes a tax of $4.35 per pack.

“The study said each dollar increase in cigarette taxes was associated with a 10 percent decrease in (the relative risk of) suicide,” she said. “Even though we have a low tobacco use rate, it may be a good reason to look at raising our excise tax for tobacco.”

Other Utah officials say the report lends credence to mental health and substance abuse treatment practices that encourage wellness across the spectrum.

The state’s 2013 Recovery Plus initiative, for instance, required all publicly funded substance abuse and mental health treatment facilities to be tobacco free by March 2013.

“When we first started talking about doing this, there was a lot of talk such as, ‘You can’t expect someone with substance abuse or mental illness to also give that up. It’s too much on a person.’ They found that’s not the case. It actually helps with their recovery,” said Teresa Brechlin, coordinator in the Utah Department of Health’sViolence and Injury Prevention Program.

Kim Myers, suicide prevention coordinator with the Utah Division of Substance Abuse and Mental Health, said Utah officials have long observed that clients in publicly funded substance abuse and mental health facilities smoke at substantially higher rates than the general population.

The authors of the report noted that clinical and general studies have likewise documented elevated rates of smoking among people with anxiety disorders, alcohol and drug dependence, and schizophrenia, among other diagnoses.

“However, it is also possible that smoking is not merely a marker for psychiatric disorders, but rather directly increases the risk for such disorders, which in turn increases the risk for suicide,” the study’s authors wrote.

Myers said the study raises the question whether nicotine itself raises suicide risk.

“How do we use that information on a population level, but also on an individual level, to reduce someone’s risk, especially when it comes to people who have some of those other risks such as serious mental illness or substance use disorders?” she asked.

The study also determined that smokers’ risk for suicide is two to four times greater than nonsmokers.

Duncan said more research is needed to understand how the link applies to Utah. Utah’s suicide rate has been consistently higher than the national rate for the past decade, according to state health department statistics, while smoking rates are very low.

“The study doesn’t give those clear answers. I think what it does do, it helps us see we should be looking at whole health, and it’s important to look at it across the board, not just issue by issue, but how all these things are tying together,” Duncan said.

http://www.ksl.com/?nid=157&sid=30887197

Smoking may increase suicide risk, study says

By MONTE MORIN, Los Angeles Times

It’s well known that cigarettes are bad for your health, but does smoking make you more likely to kill yourself too?

In a paper published Wednesday in the journal Nicotine & Tobacco Research, authors argued that smoking and suicide may be more closely related than previously thought.

The researchers analyzed suicide rates in states that aggressively implemented anti-smoking policies from 1990 to 2004 and compared them to suicide rates in states that had more relaxed policies.

Those states that imposed cigarette excise taxes and smoke-free air regulations had lower adjusted suicide rates than did states with fewer anti-smoking initiatives, authors wrote.
“There does seem to be a substantial reduction in the risk for suicide after these policies are implemented,” said lead study author Richard Grucza, a psychiatric epidemiologist at Washington University School of Medicine in St. Louis.

“For every dollar in excise taxes there was actually a 10% decrease in the relative risk for suicide,” Grucza told Washington University BioMed Radio. “The smoke-free air policies were also very strongly associated with reduced suicide risk.”

Study authors said that states with lower taxes on cigarettes and more lax policies on public smoking had suicide rates that were up to 6% greater than the national average.

This is not the first study to document a correlation between cigarette smoking and suicide, but it is among the first to suggest smoking and nicotine may be specific factors.

Up until now, researchers believed smoking coincided with suicide because people with psychiatric problems or substance abuse problems were more likely to smoke as well as to commit suicide.
“Markedly elevated rates of smoking are found among people with anxiety disorders, alcohol and drug dependence, schizophrenia and other diagnoses, in both clinical and general studies,” authors wrote. “However, it is also possible that smoking is not merely a marker for psychiatric disorders, but rather directly increases the risk for such disorders, which in turn increases the risk for suicide.”

Grucza said that the imposition of anti-smoking rules presented the researchers with a naturally occurring experiment. However, the authors did note that there were limitations on their research.

In particular, they said that since they considered state-imposed anti-smoking efforts only, their research would not account for local-level policies aimed at smoking behavior.

“While further studies may be required to establish a compelling weight of evidence, this study provides strong epidemiological support in its favor of the proposition that smoking is a casual risk factor for suicide,” authors wrote.

http://www.latimes.com/science/sciencenow/la-sci-sn-smoking-suicide-20140716-story.html

Hindsight, MN 2020: Cigarette Tax Increase Succeeds in Reducing Tobacco Usage

By Jeff Van Wychen, Fellow and Director of Tax Policy & Analysis
From Hindsight, Minnesota 2020 Blog

One of the reasons for increasing Minnesota’s cigarette tax was to incentivize current smokers to “kick the habit.” It appears that the cigarette tax increase is already having the desired effect. According to information from ClearWay Minnesota, “Quit attempts by Minnesotans have increased dramatically since the cigarette tax increased by $1.60 per pack on July 1, 2013. During the first two weeks of July 2013, QUITPLAN® Services received 256 percent more calls than in the first two weeks in July 2012, and saw a 289 percent increase in visits to quitplan.com.”

Long term, ClearWay projects that the tobacco tax increase enacted in 2013 will lead to a 47,800 reduction in the number of children who become addicted, a 16 percent reduction in youth smoking rates, incentivize 36,600 Minnesotans to quit smoking, and a 25,700 reduction in premature smoking related deaths.

A reduction in tobacco usage was incorporated into projections of how much revenue the 2013 tobacco tax increase would generate. As a result, the tobacco tax increase is generating about as much new revenue as it was expected to. According the most recent economic update from Minnesota Management & Budget, net tobacco tax collections are within three percent of their projected target since the tax increase took effect (through March 2014).

It is true that tobacco taxes are regressive, falling most heavily on low income households. However, the long-term health effects of the tobacco tax increase outweigh concerns over regressivity. After all, the positive health effects of the tobacco tax increase will likely be concentrated among low income smokers, since they are most sensitive to cigarette price increases and will be most incentivized to quit as a result. There are many ways we can change the tax code to help low income households; giving them access to cheap carcinogens should not be one of them.

http://www.mn2020hindsight.org/view/cigarette-tax-increase-succeeds-in-reducing-tobacco-usage

Letter: Time for state to update, increase tobacco taxes

By Jay Taylor, Durbin, ND

The state of North Dakota just recently unveiled newly designed license plates that will be used and distributed over the coming months/years.

The total cost to the taxpayers of North Dakota for this update was $7 million. The last time the license plate was changed was more than two decades ago.

During the 2013 legislative session, North Dakota lawmakers also passed a bill that increased fees for many hunting and fishing licenses. This legislation passed with overwhelming support from legislators, hunters and anglers. This was the first comprehensive license fee adjustment in nearly two decades.

Do you know what else in our state hasn’t been updated in the last two decades? The cost of tobacco products. One of the best ways to prevent young people from ever entering a life of addiction to tobacco —something nearly everyone (except the tobacco industry, of course) can agree is a good thing —is to make the product more expensive.

Does the North Dakota Legislature agree that our state’s tobacco tax of 44 cents per pack —the 46th lowest in the nation —is also outdated?

The effects of North Dakotans’ tobacco use also impacts the wallets of those who don’t use tobacco. North Dakota’s annual health care costs directly caused by smoking is $326 million. The portion covered by state Medicaid is $47 million.

As the price of tobacco increases, more people quit and fewer young people start the addiction.

If it was time to update our state’s license plates to the tune of $7 million and raise the fees on hunting and fishing at the expense of the taxpayers, I think it’s time to engage in the long-overdue discussion about the costs of cheap tobacco to the health of our state.

Jay Taylor, Durbin

http://www.thedickinsonpress.com/content/letter-time-state-update-increase-tobacco-taxes

 

Letter: N.D. needs a hefty tobacco-tax hike

By Brenda Jo Gillund from West Fargo, N.D.

WEST FARGO — My family and I have been really happy with North Dakota’s smoke-free indoor workplace law that passed in 2012. As a mother of young children, I feel very fortunate that young people today will have decreased exposure to secondhand smoke.

As my children get older, I worry about their exposure to marketing for tobacco products. I find it appalling that tobacco companies target their marekting to children, including enticing flavored tobacco products and colorful packaging.

We know that as we increase the price of tobacco, fewer children start smoking, and more smokers make the decision to quit.

With so many lives at stake, my question is this: Why don’t we make cigarettes more expensive so people — especially children and young adults — can really start to see how much their habits cost them?

When it hits us in the pocketbook, we start looking for a way to quit an addiction or decide never to start in the first place.

I’ve heard that North Dakota is one of the cheapest places to buy cigarettes. There’s something wrong with that, and I think it is time for action.

Gillund is a registered nurse. 

http://www.grandforksherald.com/content/nd-needs-hefty-tobacco-tax-hike