ThinkSouth -- a weblog of the Center for a Better South

11.27.2006

Immediate benefit from cigarette tax begs the question: Why not sooner?

North Carolina has long been known as the "Tobacco State" for its importance in farming and manufacturing of cigarettes, but with last year's thirty cent hike in the cigarette tax already bringing in over $110 million in revenue this year alone, and an 18% drop in cigarette purchases, many-including the Raleigh News and Observer-are wondering why the increase didn't come sooner. In early 2005, the N.C. General Assembly voted for the thirty cent increase that kicked in last September, and another nickel increase to thirty-five cents that followed in July 2006. Health officials hope to see the numbers of North Carolina smokers continue to decline in the coming years. Currently about twenty-three percent of North Carolinians smoke, the 12th highest percentage in the nation.
Low cigarette taxes seem to be endemic in the South, with nine of eleven Southern states having cigarette taxes of less than forty cents per pack. North Carolina's thirty-five cent tax is still well below the national average of $1 per pack, leaving ample room for growth, experts say. Raising cigarette taxes to the national average could have a significant long-term impact on Southern states' public health expenses, anywhere from $271.4 million in Arkansas to $2.27 billion in Florida.

Still interested? See,
N.C. cigarette tax brings drop in sales, rise in revenue- Raleigh News and Observer, 11/21/06
Doing Better: Progressive tax reform for the American South, Idea 3
(PDF)

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