USA TODAY: 2009 Federal Cigarette Tax Hike Cut Smoking

September 11, 2012


The 2009 increase in the federal cigarette tax achieved the goals of significantly reducing smoking and raising revenue to help fund expansion of children’s health insurance, according to today’s lead story in USA TODAY.

“The federal tax increase was the win-win that we thought it would be and the evidence shows that,” Danny McGoldrick, Vice President for Research at the Campaign for Tobacco-Free Kids, told USA TODAY.

Congress in 2009 increased the federal cigarette tax by 62 cents, to $1.01 per pack, as part of a law that expanded the Children’s Health Insurance program (the law also increased taxes on other tobacco products).  The increase took effect on April 1, 2009.

Federal data and a study published earlier this year by researchers at the University of Illinois at Chicago show that the cigarette tax hike had the expected health and revenue benefits:

  • Cigarette sales declined by 11.1 percent in the 12 months after the cigarette tax increase, the largest decline in decades.
  • Both youth and adult smoking rates fell to record lows in 2011, with smoking rates falling to 18.1 percent among high school students and 18.9 percent among adults.
  • According to the University of Illinois at Chicago study, youth smoking fell 10 to 13 percent immediately after the tax increase took effect.  The researchers estimated that the tax reduced the number of youth smokers by at least 220,000 in the first two months alone.
  • That study also found that federal tobacco tax revenues increased by 147 percent in the 12 months following the increase – from $7.1 billion in the 12 months before to $17.5 billion in the 12 months after.

Tobacco tax increases are truly a win-win-win solution for elected officials: a health win that reduces tobacco use and saves lives, a financial win that raises revenue and reduces tobacco-related health care costs, and a political win that polls consistently show is popular with voters.