Study May Shed Light On Cigarette Tax Debate
Posted March 1, 2005
RALEIGH, N.C. — One of the hottest topics for state lawmakers this year is raising cigarette taxes. A study done two years ago by RTI International may shed some light on the debate.
The study concludes raising taxes on cigarettes decreases smoking, especially among young people.
It also finds that bumping the tax gives a huge boost to state revenue.
"In every case that a state raised the tax by 10 cents or more, revenue went way up, and if the state did not raise taxes, inflation made the revenue smaller," said Mathew Farrelly, who co-wrote the study.
The study also mentions when a cigarette tax hike goes into effect, part of the reason for the immediate drop in sales is because people hoard cigarettes before the increase or they buy them on the Internet or on the black market.