Tax on cigarettes

1. Tax on cigarettes Project for Microeconomics by Zura Iashvili

2. Issues about cigarette Taxing 1. Will cigarette taxes have the desired effect of reducing the demand for cigarettes? 2. Do increases in cigarette taxes have any other effects? 3. Who pays for the bulk of the taxes: richer citizens or poorer citizens? 4. What do governments spend cigarette tax revenues on?

3. Effect on demand

4. Studies, and experience in state after state, show that higher cigarette taxes are one of the most effective ways to reduce smoking among both youth and adults. Every 10 percent increase in the price of cigarettes reduces youth smoking by about seven percent and overall cigarette consumption by about four percent.

7. Side Effects

8. Fake Marlboro

9. Left one is real • Right one is fake

11. Police discovered smuggling

12. fake cigarettes often have fillers such as sawdust instead of tobacco

13. Who pays more

14. As we see poor pay more

16. Government revenue and

18. Supporters of cigarette tax increases often claim the additional revenue will go toward tobacco use prevention programs. Yet the states have already proven that they will not follow through on this promise. Each year, the states collect approximately $24 billion from tobacco taxes and the 1998 state tobacco settlement. Although the Centers for Disease Control recommends that a modest 7 percent of this money — $1.5 billion — be spent on prevention programs, the states actually spend less than half of that relatively small amount.

19. Largest Ever Federal Tobacco Tax Hits Cigarette Smokers