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Friday, Apr. 29, 2016

Smokers' habit will cost more -- a whole lot more

Thursday, April 2, 2009

While President Barack Obama struggles with his own smoking addiction he had no problems signing a new federal cigarette tax that will affect everyone.

The federal tax will increase the price of cigarettes by 62 cents per pack, making it the single largest federal tobacco tax increase ever.

And, although the tax was not required to be added until April 1, Phillip Morris, makers of Marlboro, upped their prices in the middle of March. The company increased Marlboro products by 71 cents per pack while they increased the price of their smaller brands by 81 cents per pack.

The company justified this increase by saying it is an attempt to recover the losses the tax is going to cause. And after they made their increase other companies followed suit.

All tobacco products will see an increase. For example, the tax on chewing tobacco will increase from 19.5 cents per pound to 50 cents per pound.

So, if the tax is federal, why are Arkansans rushing to Missouri to purchase their tobacco? Because, on top of the federal increase Arkansas added a state tax of 56 cents per pack, raising their cost per pack by a total of $1.18.

The federal and Arkansas tax were both for similar causes -- medical attention. The federal tax is for health insurance expansion. It is estimated that the total to be raised by the tax increase will be $33 billion over the four and a half year long issue.

Arkansas Governor Mike Beebe said the state's tax increase will be used to fund a trauma center within Arkansas as well as several other health issues that need attention. A spokesperson for the tax said he truely believes the healthcare in Arkansas is better today because of this bill.

Nationally the state tax rates on cigarettes range from 7 cents per pack in South Carolina, to $2.58 per pack in New Jersey, according to the Federation of Tax

Adminstration.

A business owner in Thayer who sells cigarettes said that his business sells a lot of cigarettes to people who live in Arkansas. "We have never received anything from the federal or state government saying there has been or will be a tax increase. All our information has come from our distributers," he said.

An Arkansas business owner, who is a smoker herself, says she and everyone she knows who smokes, buys their cigarettes in Missouri. "I buy generic, the cheapest I can find," she said. "I have also noticed that people I'm around who are sometimes in a hurry that didn't used to have time to smoke a whole cigarette, used to just throw them away. Now they clip off the butt and put them back in their pack," she said.

Another Arkansas business owner who smokes said he always buys his cigarettes in Missouri. "This is the economic thing to do at the moment," he said. "Cigarettes cost as much as $90 a carton in Michigan. We have a friend that buys cigarettes in Missouri and sends them one carton at a time to family members in Michigan."

Arkansas law says Arkansans may legally possess one carton plus one pack of cigarettes that don't have an Arkansas cigarette tax. If the value exceeds $100 it's a class C felony with up to three years in prison. If it's less than $100 it's a class A misdemeanor punishable by up to one year in jail.

"We have cut down from two cartons to one carton a week. I don't think the cigarette tax should be raised when the federal government is still paying farmers to grow tobacco," the Arkansas business owner said.



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