Cigarette Costs Up Again - A BIG HIT ON THOSE WHO ROLL THEIR OWN!!!!!!!

Cigarette Costs Up Again
Friday, Mar 6, 2009 @10:12am CST
http://tristatehomepage.com/content/fulltext/?cid=59501

Many smokers are outraged. The cost of cigarettes and other tobacco products is going up again. Soon, a Kentucky tax increase will double the cigarette tax and apply a 6 percent sales tax on alcohol. Kentuckians aren't the only ones who will pay more. In less than a month, a federal tax will increase the price of every box and carton. The federal cigarette tax increase goes into effect April 1st. The government is using the extra money from tobacco taxes to expand it's State of the Children's Health insurance program, a program that provides health insurance to the under-insured.
The tax increase on a pack of cigarettes is going from 39 cents to $1.01 that's a 62-cent per pack tax hike. The federal tax on pipe tobacco is going from from $1.09 per pound to $2.83 per pound. And the tax on roll your own tobacco is going from $1.09 per pound to $24.78 per pound. That's a spike of more than 2-thousand percent! The roll your own tobacco used to be an affordable option. But after april first the products will become so expensive many stores will stop carrying them all together.

Lubbock smokers, smoke shops not too worried by new tobacco tax for children's health program
By Adam D. Young | AVALANCHE-JOURNAL
Friday, February 06, 2009
Story last updated at 2/6/2009 - 1:27 am
http://www.lubbockonline.com/stories/020609/loc_385262008.shtml

As a manager at Nothin' Butt Smokes, Michelle Casanova said she's not too concerned about a newly approved federal increase on tobacco products scaring away customers.

Despite the cost, the manager of the tobacco store at 79th and University said customers "are going to buy their cigarettes anyway.

"Everybody says yeah, they're going to quit smoking," Casanova said, "but the next day they're back in again."

The Federal State Children's Health Insurance Program expansion bill passed by the U.S. Congress and signed Wednesday by President Obama will expand funding for the children's health care program and will be funded, in part, by increasing the federal tax on cigarettes by about 62 cents to about $1 per pack of 20 cigarettes when it goes into place April 1.

The tax increase also will apply in different rates to items like snuff, chewing tobacco, cigars, pipe tobacco and tobacco for roll-your-own cigarettes from 50.33 cents per pound of chewing tobacco to $24.78 per pound of roll-your-own cigarette tobacco.

Funding from the increased tobacco tax revenue is designated to provide $35 billion over five years to expand the health care program to cover an additional four million children - increasing the program to $60 billion with 11 million children covered.

Advocates of the program like Lorri Velten, managing director of provider-payor relations at the Texas Tech Health Sciences Center, are glad to see increased funding for children's health care regardless of its source.

Velten said the federal program provides a health care option for children in families who earn too much to qualify for Medicaid but cannot afford a private health care plan and who qualify for the program.

About 10,400 South Plains children already are enrolled in the program, Velten said, and she expects an expanded program will benefit more area children and their families in the coming years.

"I'm very hopeful that more people will qualify for the program and that this will bring more awareness to it," she said. "It's important for kids to have health care available, and sometimes the only way to have that happen is through this coverage."

But Thomas McGovern, a professor in the Health Sciences Center's department of psychiatry, said he believes it is "kind of ironic" to fund a children's health care program with tobacco tax.

"Vital services should not be tied to" a "sin tax," he said. "Funding of children's health care shouldn't be funded by this tax. It should be a moral obligation."

Regardless of its source of funding, McGovern said he is glad to see the health care program expanded, and also anticipates the added cost of cigarettes to contribute to a decrease in smoking rates - especially in young people.

Michelle Bernth, spokeswoman for the American Lung Association regional office in St. Louis, which covers Texas, said she agrees that the tax increase will help curb smoking among young smokers, but that quitting will not come as easily for older smokers.

"Most people smoke what they smoke," she said describing smoking as a "serious addiction" that long-time smokers have trouble breaking.

"If you've been smoking for 40 years, people are willing to give up a lot of other things to continue smoking," she said of long-time smokers who have stronger, more-established addictions to tobacco. Youth who smoke are more likely to quit the habit when faced with higher cigarette costs partly because young people generally have less disposable cash, she said describing the concept with a cost-benefit analysis.

"If you're 16 and you've only been smoking a few years," Bernth said, "a lot of them will be more likely to give it up to pay for something else."

American Lung Association statistics indicate that each 10 percent increase in cigarette taxes results in a 7 percent decrease in youth smoking rates, she said.

Though large drops in smoking rates will not happen over night, she said, she anticipates the effects will have a "pretty immediate impact" in smoking rates among younger smokers when the tax goes into affect in April.

When Texas increased its state cigarette tax by $1 to $1.41 per pack of 20 cigarettes in Jan. 1, 2007, the state collected considerably more tax revenue from cigarettes but eventually noticed a decrease in consumption of the products, said R.J. DeSilva, spokesman for the Texas Comptroller's Office.

"Any time there's a substantial tax rate increase, you expect a decrease in consumption," he said.

DeSilva said state tax revenue from cigarettes increased significantly from 2006 to 2007 - from $509 million to $1.49 billion - but decreased to $1.31 billion in 2008.

After April, Texas residents can expect to pay about $2.42 in federal and state cigarette taxes before sales taxes.

Wilman St. Romain, manager of Heros and Legacies, like Casanova at Nothin' Butt Smokes, said he does not anticipate his business will be hard-hit by the tax increase.

St. Romain said he and many other store owners were more concerned about the potential of an increased tax on stores' inventory of tobacco products - the costs of which he believes would have closed many stores. Such a tax was not included in the tax increase.

Casanova said a person could expect to pay about $4.50 after taxes for a pack of premium cigarettes like Marlboros today, but expects the new tax and resulting adjustments for profit will raise that price to more than $5.10 by April.

To offset the increased tax, Casanova said Nothin' Butt Smokes is considering offering different lines of lower-end cigarettes at a cheaper price.

St. Romain said he expects consumers who get their fix from tobacco but have trouble paying for low-cost cigarettes, lower-end cigars and other cheaper tobacco products will have the most trouble paying the additional tax.

"That's going to hurt them the most," he said.

Information about the Federal State Children's Health Insurance Program is available at the program's Web site, www.chipmedicaid.org.

To comment on this story:

adam.young@lubbockonline.com l 766-8725

walt.nett@lubbockonline.com l 766-8706

HEALTH/ Area retailers say the new tobacco tax likely won't drive away business

First appeared on lubbockonline.com: 11:30 p.m. Thursday.

http://www.google.com/search?q=federal+bulk+tobacco+tax+increase&sourceid=navclient-ff&ie=UTF-8&rlz=1B3GGGL_enUS278US281

http://news.google.com/news?q=federal%20cigarette%20tax%20increase&sourceid=navclient-ff&rlz=1B3GGGL_enUS278US281&um=1&ie=UTF-8&sa=N&hl=en&tab=wn