Tobacco Consumption Drops in Wake of Federal Tax Hike

WASHINGTON, D. C. -- More than three years after President Obama signed legislation hiking the federal cigarette tax from 39 cents a pack to $1.01 a pack, the number of consumers smoking has dropped.

According to an analysis by USA Today, the decrease in smoking can be seen especially among teens, poor people and those dependent on government insurance. The dip in smokers came after the president signed the tax hike -- which was intended to finance expanded healthcare for children -- in early 2009 and it went into effect on April 1, 2009.

As a result, the cigarette tax increase helped restart a long-term decline in smoking that had stalled in recent years. About three million fewer people smoked last year than in 2009, despite a larger population, according to surveys by the Centers for Disease Control and Prevention. The tax hits hardest on families who make less than $50,000 a year and account for two-thirds of smokers, the news outlet added.

"The federal tax increase was the win-win that we thought it would be and the evidence shows that," says Danny McGoldrick, research vice president at the Campaign for Tobacco-Free Kids. Smoking numbers have also tapered off in the face of increased regulations such as smoking bans. In addition, tobacco companies have increased the cost of cigarettes.

"It's difficult to be specific about what influences individual adult consumer behavior, but taxes are one thing in the mix," said David Sutton, spokesman for Altria Group. He told the news outlet taxes and fees are so high that they unfairly burden adults who choose to smoke.

Increased taxes are often used on all levels to drive anti-smoking efforts. The federal tax hike helped push tobacco use down to 18.9 percent in 2011, the lowest level on record, according to the CDC surveys. Even smokers who didn't quit smoke less. In the 1990s, one of every 20 high school students smoked 10 or more cigarettes a day. Today, one out of 71 students smoke that much, the report added.

The analysis also found:

• The elderly and Hispanics cut back on smoking most dramatically, each down more than 15 percent from 2008 to 2011, according to the CDC's National Health Interview Survey. Women quit more than men. Middle-age men cut back the least, down just 1.2 percent.
• About one million adults on Medicaid quit smoking, which could reduce future health costs.
• Consumer spending on tobacco increased from $80 billion in 2008 to $98 billion in 2011 in inflation-adjusted dollars even though the amount of tobacco purchased fell 11 percent , Bureau of Economic Analysis data show. Higher taxes accounted for about half that spending increase. The rest went to tobacco companies and retailers.