If you think your cigarettes are getting even more expensive, you’re right. In the past 10 years, 47 states and the District of Columbia have implemented 105 cigarette tax rate increases. (In contrast, Missouri and North Dakota haven’t raised cigarette taxes since 1993, while California last hiked them up in 1999.)
According to the Campaign for Tobacco-Free Kids, states currently charge an average of $1.47 in taxes on each pack of cigarettes. As a result, the average price for a pack of smokes in the United States is now $5.58, though the price fluctuates wildly by geography. In Missouri — the state with the nation’s cheapest retail price — a pack costs $3.93, while in New York — the most expensive state — it’s a whopping $9.11. And that’s outside New York City. Here in the five boroughs, where there are additional city taxes, a pack can cost anywhere from $11 to $13.
The average smoker burns through 13 to 16 cigarettes a day, or four to six packs a week. That adds up. The average smoker forks over at least $1,500 a year, while here in New York City, it’s closer to $3,300.
But because smoking, like takeout food and store-made coffee, hits our wallets in a series of small purchases, it can be easy to overlook how much you’re spending. Still, it has a psychological impact: One of many reasons governments implement cigarette taxes is to reduce smoking among price-conscious consumers.
It works: Research shows that people smoke less as cigarettes get more expensive. As tobacco giant Philip Morris (PM) stated in its 10-Q for the Securities and Exchange Commission on Nov. 3, 2008, “Tax increases are expected to continue to have an adverse impact on sales of tobacco products by our tobacco subsidiaries, due to lower consumption levels.”
Smokers will have a lot to ponder in coming months, as the Department of Health and Human Services implements its new packaging policy requiring warning labels that include graphic photos of the health damages caused by smoking. In the meantime, we wanted to know how sensitive smokers are to the price of their cigarettes, so we hit the streets of Manhattan during lunchtime to find out.
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