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January 10th, 2008:

Wisconsin’s Cigarette Tax Inspires Many To Quit.

Jan 10, 2008 11:32 AM (1 day ago) AP

MADISON, Wis. (Map, News) – The increase in Wisconsin’s cigarette tax seems to have inspired many to quit.

The week after the tax went up, the state’s tobacco quit line received as many calls as it got all of last year. Nine-thousand people called the toll-free line in the first week of January. Usually only about 200 people a week call the Wisconsin Tobacco Quit Line.

The cigarette tax increased by US$1 per pack on Jan. 1.

On New Year’s Day, the tax for a pack of cigarettes in Wisconsin increased by $1. Wisconsin residents are now paying $1.77 in taxes for a single pack of cigarettes. The tax on a single pack of cigarettes in Michigan is $2. Maureen Busalacchi, executive director for SmokeFree Wisconsin, said the organization estimates 33,000 adults will quit for good because of this tax increase.

Thousands of people are calling 1-800-QUIT-NOW looking to quit, she said. The demand for quitting is high, and two-week starter kits of medication are being offered to help smokers kick the habit.

“With the support people are getting from the quit line, hopefully, that number will be higher but that is our projection,” Busalacchi said. Wisconsin has a population of 5.5 million, and there are 900,000 smokers in the dairy state.(HK has 7 million population and 840,000 smokers hence the comparison)

A smoker usually does not quit the first time he or she tries. “The more you quit, the better you get at it. If you’re not successful, try again because your success rate increases,” Busalacchi said. Among carcinogens and other harmful chemicals, cigarettes contain nicotine, a highly-addictive substance. “Your brain is calling for this,” Busalacchi said. “We should support (people) and help them so they can be successful in quitting.” Busalacchi said Smoke Free Wisconsin was one of the biggest proponents of this tax increase. “We support it because it is the best way to reduce use from starting a lifetime of 66,000 kids won’t get started smoking because of this tax,” Busalacchi said. “We hope that it exceeds our expectations in the number of people that quit smoking. With health care costs and how much Wisconsin spends a year, that can be nothing but a good thing.”

Wisconsin currently spends $10 million a year for tobacco prevention, according to Smoke Free Wisconsin. The U.S. Centers for Disease Control and Prevention (CDC) recommends the state spend between US$31.2 million and $82.4 million a year to have an effective, comprehensive tobacco prevention program.

Money generated from the increased tax on cigarettes will go into the state’s general fund. “It originally was suppose to go into Medicaid, which is really the best place for taxpayers … we spend over a half a billion dollars in Medicaid treating tobacco related diseases. That is just Medicaid,” Busalacchi said. Wisconsin is the 12th highest taxed state for cigarettes in the nation. Six states have cigarette tax rates of $2 or more with 22 states that have cigarette tax rates of $1 or more. New Jersey is the highest at $2.28 in taxes for a pack of cigarettes.

US Anti-Tobacco Efforts

U.S. falls short in anti-tobacco efforts – report

Thu Jan 10, 2008 12:00am EST – Reuters
By Maggie Fox, Health and Science Editor

WASHINGTON, Jan 10 (Reuters) – The U.S. Congress and President George W. Bush have stymied efforts to tighten regulation of tobacco and discourage smoking and states have not spent nearly enough to battle cigarettes, the American Lung Association said on Thursday.

The group implied that heavy lobbying and spending by tobacco companies was influencing at least some politicians and urged Congress to give the Food and Drug Administration the authority to regulate cigarettes.

“While many states have failed to make meaningful progress at protecting their most vulnerable citizens, the tobacco companies are spending billions of dollars annually marketing their deadly products,” the report reads.

“A report issued by Common Cause and the Tobacco-Free Kids Action Fund found that the tobacco industry made almost $3 million in Political Action Committee contributions to federal candidates during the 2005-2006 election cycle, including more than $1.7 million in contributions directly to federal candidates,” it adds.

“The Institute on Money in State Politics found that tobacco companies and retailers gave over $96 million to state-level candidates, committees and ballot measure campaigns during the 2005 and 2006 election cycle.”

In 1998, states reached a settlement with tobacco companies in which they received $246 billion over 25 years to pay for the costs of smoking-related illnesses.

But anti-smoking campaigners say states have raided these and other tobacco-prevention funds to cover budget deficits, build roads or pay for non-tobacco related projects.


“While the American Lung Association applauds the U.S. Congress for increasing the federal cigarette excise tax by $0.61 to $1.00 per pack, unfortunately it was vetoed by the president and will not take effect,” the report read.

“The increased tax would have resulted in current smokers quitting and fewer children starting to smoke.”

The report praises efforts by some states.

Twenty-one states, the District of Columbia and Puerto Rico have now approved comprehensive smoke-free air legislation,” it reads.

In 2007, seven states — Illinois, Maryland, Minnesota, New Mexico, New Hampshire, Oregon and Tennessee — significantly strengthened their smoke-free air laws. Tennessee is the first traditional tobacco-growing state to pass strong restrictions on smoking in public places and workplaces.

But states are slower to raise tobacco taxes — which several studies show can deter smokers. And they also do not spend nearly as much as is recommended on programs to prevent smoking and to help smokers kick the habit, the Lung Association complained.

“More than half of states have not passed comprehensive laws prohibiting secondhand smoke in workplaces and other public places,” the report reads.

“Until the political will can be found to implement the proven and effective policies graded in this report, over 438,000 people each year will continue to die from tobacco-related diseases.”

The Lung Association report accuses tobacco companies of marketing to youths and even to children with new flavored cigarettes and brightly colored packaging.

Nearly 21 percent of Americans smoke — a total of 45 million people, according to the U.S. Centers for Disease Control and Prevention.

(Reporting by Maggie Fox, editing by Todd Eastham)

Chinese Tobacco Economy

Effects of cigarette tax on cigarette consumption and the Chinese economy.

Hu TW, Mao Z. – University of California at Berkeley, California 94720, USA.

OBJECTIVES: To analyse a policy dilemma in China on public health versus the tobacco economy through additional cigarette tax.

METHODS: Using published statistics from 1980 through 1997 to estimate the impact of tobacco production and consumption on government revenue and the entire economy. These estimates relied on the results of estimated price elasticities of the demand for cigarettes in China.

RESULTS: Given the estimated price elasticities (-0.54), by introducing an additional 10% increase in cigarette tax per pack (from the current 40% to 50% tax rate), the central government tax revenue would twice exceed total losses in industry revenue, tobacco farmers’ income, and local tax revenue. In addition, between 1.44 and 2.16 million lives would be saved by this tax increase.

CONCLUSIONS: Additional taxation on cigarettes in China would be a desirable public policy for the Chinese government to consider.