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Taxes: Up in smoke

It doesn’t seem that long ago when smoking was the norm, homes displayed a variety of ornamental and free standing ashtrays in every room and smoking with the group was ‘cool’. There was a national uprising when segregation hit the airlines and smokers were relegated to the back of the plane.  But having quit myself over 28 years ago, I’d completely lost track of the cost. Back in 1985 a pack had cost around $1.70.

People were still measuring their intake in terms of ‘packs per day’.  It seemed that true smokers would finish the packs they opened each day, so it was common for a person to be either a one or a two ‘packer’.  So what does a two packer pay per year in NYC? At a median price of $10.50 per pack, you’d pay $7,665 annually. Holy smoke! The 10 highest taxes per pack are listed below.

  1. New York City ($1.50 per pack) plus New York State ($4.35) – $5.85 per pack
  2. Chicago ($0.68) plus Cook County ($3.00) plus Illinois ($1.98) – $5.66 per pack
  3. Evanston ($0.50) plus Cook County ($3.00) plus Illinois ($1.98) – $5.48 per pack
  4. Cicero ($0.16) plus Cook County ($3.00) plus Illinois ($1.98) – $5.14 per pack
  5. Rosemont ($0.05) plus Cook County ($3.00) plus Illinois ($1.98) – $ 5.03 per pack
  6. Cities with no tax in Cook County ($3.00) plus Illinois ($1.98) – $4.98 per pack
  7. New York state ($4.35), excluding New York City – $4.35 per pack
  8. Bethel ($2.21, effective February 2013) plus Alaska ($2.00) – $4.21 per pack
  9. Anchorage ($2.206) plus Alaska ($2.00) – $4.206 per pack
  10. Rhode Island ($3.50), with no local cigarette taxes – $3.50 per pack

They call the cigarette tax a sin tax, but it could also be called a choice tax.  You only pay if you’re addicted.  The shift from celebrity promotion to punishment by tax is one of the more interesting evolutions in American social behavior.

Mark Schuster, Partner

May 29, 2013

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