Should the cigarette tax be raised in Minnesota?

A national anti-smoking group today issued a report saying a $1 increase in the tax per pack on cigarettes could raise almost $100 million toward Minnesota’s budget deficit.

An increase in the current $1.56-per-pack tax would also lead 19,400 Minnesotans to quit smoking, and save 18,200 residents from premature death, according to the Campaign for Tobacco Free Kids. Here’s the full report.

New Yorker Mark Haines on CNBC (ignore the blubber at the beginning from the other anchor) gives the researcher-proponent the admirably curmudgeonly treatment, include the idea that the proposal “contains the seeds of its own destruction.” If you’re trying to get people to stop smoking, doesn’t that decrease the revenue to the state?

Unfortunately, the other co-host can’t keep his ego out of the conversation.

Bob Moffitt of the American Lung Association in Minnesota, says 17.6 percent of Minnesotans over 18 smoke. That means the $1 increase would force only 1 of 204 current smokers to quit smoking.

Wisconsin’s cigarette tax, incidentally, is $2.52 per pack. The group says 20,500 people there would quit smoking with a $1 increase. According to the state of Wisconsin, 19.6 percent of Wisconsinites smoke. So the $1 increase would force 1 in 210 people to quit smoking.

It would appear, then, that for every $1 increase, about 1 out of 208 people quits. If the state(s) were interested in eliminating smoking, why not raise the cigarette tax to $208 per pack?

Other research suggests that for every 10 percent increase in the price of cigarettes, consumption is reduced by 3 to 5 percent. That would mean — if the napkin calculations are correct — that a $29 per pack price should eliminate the problem.

  • John Malone

    Excise taxes on cigarettes are a regressive tax which fully engender the tyranny of the majority. It seems like smokers are seen as a bottomless piggy bank by politicians who refuse to reign in their own spending.

    And the farce is that while smokers die disproportionally from various cancers, economically then tend to die right after their productive working years have finished. The health care costs of smoking are a red herring indeed.

    I’m an adult. If I want to smoke, it’s my own damned business. I am certainly aware of the consequence.

  • The math behind figuring how many Minnesotans would quit if the state raised cigarette taxes by $1 a pack gets a little tricky, Bob. Here’s why:

    Research shows that every 10 present increase in the price of a pack of cigarettes, it can reduce the number of kids who smoke by 6-7 percent.

    The 17.6 percent number I shared with you only applies to ADULT smokers over 18. Unfortunately, a lot of kids under 18 smoke in Minnesota, and at higher rates (23% for high school kids) than adults.

    To cover one issue that Mr. McGoldrick didn’t get to, there is an additional savings to the state when fewer of its residents smoke — significantly lower health care costs to taxpayers. California, with a adult smoking rate below 15%, can now see its cases of lung cancer begining to decline, compaired to other states. While California’s budget prblems are well known, they would be even worse with more smokers.

  • Bob Collins

    Recall, however, the defense that the tobacco industry was not allowed to enter in the Minnesota tobacco trial — that the costs of health care to a state because of smoking are offset by the fact smokers die a lot younger, and hence aren’t around to get sick (with smoking and non-smoking related illnesses) and cost a state money.

    That brings up the other possibilities in the equation. If you don’t die of a smoking-related illness, you’re going to die of something else. How much does it cost the state for me to die?

  • Here’s another way to look at it. The report states that “18,200 residents would be saved from premature death.”

    The Massachusetts-based Safety Research & Strategies group has estimated that as many as 26 people may have died as a result of unintended-acceleration incidents in some Toyota vehicles since 1999. That high-end estimate led to a world-wide recall, and untold media attention and embarasment to Toyota.

    Even if this proposal just gives ONE person a longer and healthier life, isn’t it worth a closer look? Certainly for 18,200 people…

  • Without going into the perverse economics of premature death, Bob, consider that many of the smoking-related disease are not instant killers.

    Yes, many people with lung cancer do not survive the disease for very long, but that’s NOT the most common smoking-related disease.

    You can live for many years after a heart attack or stroke has taken much away. Also, chronic obstructive pulmonary disease (COPD) is often the disease that smokers end up with. There is no cure, and an estimated 90% is thought to be smoking related. In 2007 alone, nearly 6,000 Minnesotans were hospitalized with COPD.

  • Bob Collins

    But that’s the philosophical question. None of those people, presumably, are being forced to smoke. On the basis of humanity, it’s a tough sell. In terms of economic impact of their health care, that’s why I ask what’s the total cost to the rest of us of someone who dies of lung cancer at 56 — or who lives for 10 years with asthma — as opposed to some healthy person who never got sick a day in his life, and then around age 73 lives with one ailment after another for 20 years.

    Any actuaries in the house?

  • John

    The ” ONE person a longer and healthier life” argument gets no traction with me. I can think of plenty of we could do to give “MANY people a longer and healthier life”. Park all our cars for starters. Close the fast food restaurants. Reinstate prohibition.

    We allow things that are not good for us in the name of personal freedom. The reason smoking gets picked on is because it’s a minority of people who do it, and our puritanical heritage allows us to look down on people who do it. Just try to outlaw or heavily tax greasy food or driving when you could walk and see how far you get.

  • Ben Chorn

    For myself, a higher cigarette tax would not prevent me from smoking, only cause me to smoke less. I’d like to see smoking rates for states based on taxes, (I got a pack of cigs in NC for only $3.50 a pack!), and population density. Spending most of my time at school here in Montana, a lot more people here smoke than Minnesota.

    To be honest, I don’t see why smokers need to be punished any more. There’s no more public smoking ANYWHERE and taxes are already high. If the state wants more money they should relate it to where it benefits- and it can all be helped by a higher sales tax, property tax, or income tax.

  • John O.

    The State of Minnesota is as hooked on cigarette tax revenues as much as those who smoke. $384.5M a year. is a link to the MN Dept. of Revenue and info on cigarette tax collections in FY 2007 and 2008.

  • JD

    I don’t think it’s unreasonable to ask smokers to pay a little more for their smokes. They’re already recouping that money through WIC and GAMC anyway… It’s not dissimilar to expanding the upper income tax rates & brackets, then giving the tax back to them in golf cart credits.

  • kennedy

    If this were ttruly about health, we would also be aiming at unhealthy diet as previous posters suggested. Obesity is more common than smoking and costs our society more than smoking.

    Double the sales tax on fast food, chips, candy, and sugared beverages. I’m not a health nut and would frequently be paying this. Maybe I would occasionally choose a banana over a Snickers.

  • Rich W

    Just don’t fool yourself into thinking this is a way to increase revenue. Over the last 2 years WI Gov. Doyle has increased the cig tax $1.75. The $0.75 increase last fall was projected to increase tax revenue by $145 million, so of course they added that into the budget and spent it. The fact is that tax revenue has decreased by $92 million. So clearly the correct move is to jack up the cig tax another $1 per pack to make up for the budget shortfall. Morons.

    And no, I am not a smoker – never have been.