Does Imposing Cigarette Taxes Encourage Better Behavior?

For about ten years of my life, I was a proud and defiant smoker. I enjoyed a good cigarette at lunch time and I will not lie: I still occasionally smell something attractive – if not overly pleasant – about cigarette smoke as I pass through the doors of the local malls and restaurants. Through most of this time, I was working at jobs that paid considerably less than I currently make. Indeed, these entry-level jobs in the IT world paid somewhat less than a living wage for a single person.

But at no time did I ever seriously consider quitting my habit for financial reasons. I’d bum smokes off people; I’d complain about the prices; I’d sit in my livingroom and climb the walls till pay day. But I never once said, “cigarette prices are too high! I’m quitting.” Tut-tut if you must, but I suspect that this is also the case with many other current and former smokers.

Yet it is precisely this fiction that is trotted out every time the cigarette tax goes up in New York or nationally: raising taxes on cigarettes is a disincentive to smoking them. My evidence thus presented is purely anecdotal and colored by my personal opinion of the matter, but I recently decided to go in search of more tangible evidence to suggest the real effect of taxation on populations of smokers. The thought came to mind when I once again heard about the “Fat VAT” on sugary drinks proposed on both the New York State and national levels.

The results of my initial research are, well, not terribly supportive of that or really any other hypothesis, I’m afraid. The numbers have been adjusted as seemed fair by comparing the taxes not on their own, but rather as a percent of income. In this way, we get a truer sense of what the relative “weight” of a cigarette tax actually is in each state.

New York is helpfully (depending on your point of view) at the very top of the most-taxed stogie states in the Union. Yet our smoking population, while certainly much lower than many other states, is not where you might expect it to be if the hypothesis were true. Meanwhile, the next most taxed state by income, Rhode Island is about as near to the top of the list of smokin’est states as we are to the bottom of the list. And all down the line, there is nothing approaching a consistent pattern.

To be sure, this data is at best evidence rather than proof of anything conclusive. There are a number of variables not factored in, such as cultural and historic factors. We may certainly say that the comparing the various states on cultural levels is indeed comparing apples to oranges. What we might really prefer – and what I have as yet had difficulty locating – is data in a specific state, organized by year, so we can see the percent change in taxes relative to the percent change in smokers.

But even if we allow these faults, certainly one would expect at least some smattering of – some semblance of – a pattern. The scatter chart on the second tab shows this not to be the case – if anything, a reverse trend could be imagined from the data.