Economic View of Tobacco Taxation

In: Social Issues

Submitted By Chrissy77R
Words 1014
Pages 5
Tobacco Taxation 1

Tobacco taxation is a hot topic and all 50 state governments have enacted taxes on cigarettes, and many have raised their taxes several times. Taxes on cigarettes are a way governments can achieve two social objectives; the first objective is to reduce the number of citizens who smoke. The government issuing the cigarette tax hopes that the rise in the cost of a pack of cigarettes will persuade people to quit smoking. The second objective is to raise government revenue. A cigarette tax, like any other tax, increases the amount of revenue governments can spend on social programs. Where there’s smoke, there’s taxes — especially for New Yorkers. In a 2010 budget move officials say will generate $440 million in revenue, the state legislature passed a bill that gave New York the highest cigarette tax in the country. On July 1, 2011 every pack sold in the state cost an extra $1.60, raising the total state tax to $4.35, pushing the average cost of a pack up to $9.20. For New York City residents, the cost of a pack will now come out to close to $11 — a $2 rise from just over a year ago. The $440 million in revenue will benefit health care programs, AIDS drugs subsidies, tobacco cessation programs and $71.6 million will go to the state cancer research center in Buffalo. Supporters also applaud the health benefits, saying it will reduce the number of smokers by tens of thousands of people. Tobacco consumption is the leading cause of preventable death in many countries. Supposing current smoking tendencies continue, as many as 650 million people that are currently alive will die from a smoking-related disease. Within several decades, at least 10 million people will die annually from a smoking-related disease, making smoking the largest cause of death throughout the world. Fortunately, there is an effective and widely familiar tool to fight tobacco…...

Similar Documents

Tobacco Use in Poland

...TOBACCO USE IN POLAND 11/8/2012 HCM657-DL Introduction Smoking causes a long list of diseases, leading to premature death in half of all smokers. Tobacco is implicated in numerous cancers including bladder, kidney, larynx, mouth, pancreas, and stomach. Lung cancer is the most common disease caused by smoking. Smoking is also a major cause of cardiovascular diseases, including strokes, heart attacks, and respiratory diseases such as emphysema. Many additional costs are generated due to health issues caused by smoking. Poland is slow in bringing around tobacco control, but continued advancements and increased social awareness is changing the perspective of many smokers. According to the World Health Organization – Europe 2009 report, there are approximately nine million tobacco-smokers in Poland, representing 29% of the country’s adult population. Results of a national survey conducted in 2007 indicated that 34% of men and 23% of women smoked on a daily basis. Tobacco-smoking has been a persistent and serious social problem for many years. (1) Tobacco use is the single most preventable cause of death in the world today, killing as many as half the people who smoke tobacco. Global Adult Tobacco Survey (GATS), conducted in Poland in 2009-2010, was a nationally representative household survey (2). This was conducted by men and women aged 15 and older regarding tobacco consumption. The reasoning behind the survey was to produce internationally comparable data on......

Words: 3770 - Pages: 16

Tobacco Production

...Operational Practices of Tobacco Industry PRODUCTION MANAGEMENT - E [Dr. Irshad Khan] Submitted By Irfan Junejo – 9063 13th April 2011 TABLE OF CONTENTS TABLE OF CONTENTS 2 EXECUTIVE SUMMARY 4 INTRODUCTION: 5 Some Facts About Tobacco Industry: 5 NUMBER OF FACTORIES, PRODUCTION: 5 2.1.0 NUMBER OF UNITS PRODUCED: (DURING LAST FIVE YEARS) 5 2.1.1 POTENTIAL FOR PRODUCTION: 5 2.2.2 AREA UNDER DIFFERENT TYPES OF TOBACCO IN PAKISTAN (HECTARES) 6 2.2.3 PRODUCTION OF DIFFERENT TYPES OF TOBACCO IN PAKISTAN (MILLION KGS) 6 2.2.0 MARKET CAPITALIZATION: 6 2.3.0 NUMBER OF FACTORIES: 6 2.4.0 MAJOR CITIES FOR THE INDUSTRY WITH INDIVIDUAL STATISTICS: 7 INDUSTRY CONTRIBUTION TO GDP: 7 EMPLOYMENT IN INDUSTRY: 7 TOTAL TRADING STATISTICS FOR THE LAST TEN YEARS (1997-2007): 8 Government Legislations: 8 AREA UNDER DIFFERENT TYPES OF TOBACCO IN PAKISTAN (HECTARES) 8 PRODUCTION OF DIFFERENT TYPES OF TOBACCO IN PAKISTAN (MILLION KGS) 9 OVERVIEW: 9 COMPANY: 1 PAKISTAN TOBACCO COMPANY 9 COMPANY PROFILE: 9 COMPANY HISTORY: 10 COMPANY’S BRANDS: 10 CAPACITY UTILIZATION: 11 CURRENT MANAGEMENT & OPERATIONAL STRUCTURE: 11 BOARD OF DIRECTORS: 11 COMPANY: 2 LAKSON TOBACCO COMPANY 11 Company Profile & HISTORY: 11 Mission: 12 Corporate Values: 12 COMPANY’S BRANDS: 12 CURRENT MANAGEMENT & OPERATIONAL STRUCTURE: 12 BOARD OF DIRECTORS: 12 EXPANSION PLANS: 13 CAPACITY UTILIZATION: 13 FINANCIAL ANALYSIS: 13 COMPARISON: 14 INDUSTRY GROWTH RATE FOR LAST TEN......

Words: 6461 - Pages: 26

Economic Thinking to Government Spending and Taxation

...guideposts of economic thinking to government spending and taxation Well from reading this week reading, the economic way of thinking requires more than just making decisions on plain information. For it requires government incorporating certain guidelines such as the building blocks of basic economic theory into their thought process when making decisions. There are eight principles that characterize the economic way of thinking; however, I will only identify four. According to the textbook” “One of the first guidelines is referred to as the use of scare resources is costly, so decision-makers must make trade-offs. Economists sometimes refer to this as the “there is no such thing as a free lunch” principle, it is important to recognize that the use of scarce resources to produce a good is always costly” (Gwartney et.al, 2013). In economics, the opportunity cost of an action is the highest valued option that is given up when choices are made in economic thinking. 2. When government make decisions, they should make decisions on the margin of how much it is going to cost and which option seems like the most economical way. “When making a choice between two alternatives, individuals generally focus on the difference in the cost and benefits between alternatives. Economists describe this process as marginal decision-making, or thinking in such cases” (Gwartney et al, 2013). 3. Having information on the economic factor that helps government make better decisions in......

Words: 377 - Pages: 2

Taxation

...1 http://www.miteshk.webs.com TAXATION CHAPTER 1: INTRODUCTION The word tax is derived from a Latin word “Taxare “it means to estimate or value. The term tax to a common man means money paid to the Government out of compulsion without deriving any benefit directly by himself or his family members. As per taxation tax means statuary payment to be made b the public and imposed by the Government. Definition: As per Prof. Adams: ¾ From the Stand point of the state, a tax is source of derivate revenue ¾ From the point of the citizen, A tax is a coerced payment ¾ From the Administrative point of view, it is a demand for money by state in conformity to establish rules ¾ From the point view of a Theory, a tax is a contribution from the individual for common expenditure Characteristics of Tax: 1. Tax can be imposed by the Government only 2. Taxes are paid in the form cash only 3. the aim of levying tax is to promote the welfare of the people living in the country 4. the object of tax is to raise revenue to the Government 5. tax is a legal collection 6. payment of tax involves an element of sacrifice 7. it is levied by the Government by virtue of its power confirmed under the Constitution 8. Tax is not a payment for specific service rendered by the Government to tax payer 9. Tax is imposed on income or wealth or on a commodities i.e. either directly or indirectly, but tax is actuallypaid by the individuals. Objects......

Words: 19516 - Pages: 79

Taxation of Tobacco in India

...ECONOMICS ASSIGNMENT Topic :TAXATION OF TOBACCO IN INDIA By- Group 3 Q1.Interpret table 3.1 and 3.5.The team is asked to evaluate the future prospects of ITC's tobacco products in the rural areas based on the numbers in these two tables. Write a brief report explaining ITC's rural market potential based on the numbers in the case According to the table 3.1, there is a minimal increase in the excise duty of unfiltered cigarettes in the years 2006-07 and 2007-08 and large increase can be seen in the year 2008-09. In the case of filtered cigarette, there has been a minimal increase or rather we can say that excise duty has been constant for 2007-08 and 2008-09. In the case of bidis, the excise duty is constant for 2006-07 and 2007-08 while decreases in 2008-09. So we can make out from this given table that by increasing the cost of unfiltered cigarette the government wants people to shift from unfiltered to filtered cigarette which will eventually lead to betterment of public health. Secondly, it also helps the Government in the generation of revenue. According to table 3.5, there has been an increase in consumption of bidis and less in cigarettes from 2000-01 to 2005-06. While due to the increase in price of bidis in the year 2006-07, the cigarette consumption of brands likeGold flake, Navy cut, Gold flake small and Wills flake has increased. As the price is increased there would be less consumption of cigarette while on the other side the revenue generated would......

Words: 1466 - Pages: 6

Tobacco

...THE ECONOMICS OF TOBACCO TAXATION IN INDIA Tobacco taxation in India tends to be low for the most commonly consumed tobacco products. In order to suggest ITC about their strategy for the rural market, we must understand the taxation policies that prevail. India has a tobacco tax structure which is complex, different taxes for hand-rolled versus machine-made bidis, etcetera. In the table given, we observe that bidis are taxed less than filtered cigarettes. At the same time, the tax remains constant for bidis whereas it increases for cigarettes. In table 3.5, we observe that cheaper the tobacco, higher the tax because we assume that cheaper tobacco is more hazardous. But for bidis though the cost is cheap, it is taxed less as it focuses on the mass consumer whose buying potential is less. So its demand is more elastic than the expensive tobacco. Considering the data given in table in 3.1 and 3.5, tobacco products like bidis are less taxed, and it caters to the needs of majority of the consumers. Cigarettes and bidis are consumed by classes of people from different economic strata. Rural markets have a potential for bidis since the lower income group resides more in rural areas. The taxation on bidis is almost constant through the years, it is more profitable to enter the tobacco market through bidis in rural areas..  Own price elasticity in rural areas for bidis is more elastic than in urban areas. For example, an increase of 10% in price will decrease the......

Words: 1194 - Pages: 5

Taxation and Cigarettes

...Abstract Cigarette and Tobacco taxation has been a hot topic for years. Typically, the taxing of this product is accepted as there are health concerns associated with the consumption of tobacco products. The concept of raising cigarette taxes aligns with goals of increasing revenue for local, state and federal governments, and also works to increase the overall public health of the country. Although the taxation is widely accepted, there are concerns associated with who the taxation effects primarily, how funds are being utilized and issues with meeting budget goals with the earned revenue. This paper addresses each of these topics in an effort to identify the effectiveness of cigarette and tobacco taxation. Introduction The concern associated with the health risks of tobacco use and cigarettes began as early as the 1930’s. The ill effects of tobacco were studied by epidemiologists in long term case studies to assess the increase of lung cancer mortality to smoking. The findings were considered merely casual by Surgeon General Leroy Burney in 1957. As a few years passed, the concern between the relationship of smoking and health grew. This led to The American Cancer Society, The American Heart Association , The National Tuberculosis Association and the American Public Health Association collaborating together to address a letter to President Kennedy. In this letter they asked for a call to action on the issue of cigarette smoking. The Kennedy......

Words: 3518 - Pages: 15

Taxation and Cigarettes

... | | Matt Evans On the surface, this November's Ballot Measure 44 is simplicity itself. The measure will increase taxes on cigarettes by 30 cents per pack, as well as on other tobacco products, and the revenue raised will be dedicated to the Oregon Health Plan and tobacco use reduction programs. What could be more straightforward? However, the measure raises a host of interesting issues that voters should weigh prior to casting their votes. Most important, of course, is the core of the measure, its purpose: to raise money for the Oregon Health Plan, ostensibly to offset costs the plan incurs from smoking-related illnesses. State revenue estimators understand that anytime you raise the tax on something, you will get less of it. This is certainly true in the case of Ballot Measure 44 and its effect on cigarette smoking. In fact, the State Legislative Revenue Office estimates that cigarette use will decline about 4.5 percent due to the increased taxation. In a series of four steps over the past 17 years, Oregon has raised the tax on cigarettes from 9 cents per pack to the current 38 cents. Each of these tax increases represented a smaller amount per pack than Measure 44's 30 cents. In every instance, tobacco use has fallen by more than the current projection of 4.5 percent. In fact, tobacco use fell an average of almost 9 percent--twice the state's estimate--after those four cigarette tax increases. The typical pattern is for cigarette smoking to fall dramatically in......

Words: 2992 - Pages: 12

Health Economic Costs of Tobacco Smoking in Canada

...Health Economic Costs of Tobacco Smoking in Canada [Name of the Writer] [Name of the Institution] Health Economic Costs of Tobacco Smoking in Canada Introduction This paper is about the use of tobacco in Canada. The paper will also identify the economic and health costs of using tobacco in Canada. There will also be a discussion of tobacco smoking prevention. The paper will follow a proper pattern. There are several concerns about tobacco smoking in Canada. The government is very concern about this issue and working really hard to get rid of this dangerous habit. The Canadian population is addict to this unhealthy habit of tobacco smoking (Albert Health Services, 2012). Discussion Tobacco smoking is really injurious to health. The smoke of tobacco contains several dangerous chemical. These chemicals are injurious to both smokers and nonsmokers. There are more than 7,000 chemicals in the tobacco smoke. Al large amount of them, around 250 chemicals, are very harmful. These harmful chemicals include carbon monoxide, hydrogen cyanide, and ammonia. The habit of tobacco smoking is very dangerous for health. It affects almost every organ and part of the body. The ultimate impact of smoking is the diminishing of overall health (Propel, 2012). Health Consequences of Smoking There are millions of Canadian who smoking has caused lots of problems. It is also the primary cause of cancer. This cancer even leads to death. It cause causes to several......

Words: 3675 - Pages: 15

Tax and Tobacco

... Term Paper For B.B.A(Hon's) Second Year Course Netrakona Govt. College Department of Management Topics : Taxes on Tobacco in Bangladesh Date : Letter of Transmittal Date: 25/04/2014 A.K.M. Khairul Hasan Lecturer Department of Management Netrakona Govt. College Netrakona Subject: Submission of Term paper on Taxes on Tobacco in Bangladesh" Sir, This is my pleasure to submit this term paper on "Taxes on Tobacco in Bangladesh" under the Supervisor. A.K.M Khairul Hasan. I have done my level best to completed Term paper in time. The whole experience of this Term paper enables me to get an insight in to the real life situation. I have really enjoyed working in this field this Term paper prepared by me as a fundamental issue. I hope This Term paper will enable to find out real scenario of on existing Tues or tobacco in Bangladesh. I would like to thank you for your supportive suggestion and helping me to carry on this study. With out your direct helps this term paper would not be prepared by me. Abdul Aziz Roll No: 9822765 Registration No: 1800488 Session: 2010-2011 B.B.A (Hons.) Second year Class Roll: 227 Netrakona Govt. College Netrakona. Author's Declaration of Originality I hereby certify, that I am the sole author of this Term paper on "Taxes on Tobacco in -Bangladesh". it is prepared for a partial fulfillment of BBA degree. To the best of my knowledge my Term paper does not infringe upon anyone's copyright nor violate any proprietary rights.......

Words: 7774 - Pages: 32

The Tobacco

...English 1200 10/20/2012 “The” Tobacco Luxury, money, power, pure; these are the type of words that come to mind when one thinks of a cigar, another familiar word is usually Cuba. Cuban cigars contain the finest tobacco in the world and the numbers show for the communist economy as it generated four hundred million dollars last year for Cuba alone according to Money News. The United States which is the largest Cigar market in the world does not even sell Cuban cigars due to a fifty year-long trade embargo with the trifling sized neighbor which is the United States. So then where is Cuba exporting this product to generate such large numbers? Western Europe is responsible for the business, Imperial Tobacco Group located in Britain to be more specific, which is the largest cigar distributor to European nations. With a relationship like this one, the benefits are on each side of the transaction. The Imperial Tobacco group employs over 37,000 people and operates forty-seven manufacturing sites across the globe (Imperial Tobacco Group). That is a large amount of Europeans being employed by a growing industry. With the company mainly based in the United Kingdom, Western Europe is the biggest consumer of Cuban Tobacco right now (Money News). Imperial Tobacco remains at the top for cigar sales across Western Europe. Where would this power house company be without the fine Cuban tobacco? The company would definitely not be worth as much as they are now. The profit for......

Words: 1097 - Pages: 5

Tobacco

...A Fire in the Global Village: Teaching Ethical Reasoning and Stakeholder Interests Utilizing Tobacco Lucien J. Dhooge Sue and John Staton Professor of Law Journal of Legal Studies Education Volume 29, Issue 1, pages 95–125, Winter / Spring 2012 [T]is a plague, a mischief, a violent purger of goods, lands, health; hellish, devilish and damned tobacco, the ruin and overthrow of body and soul.( Richard Burton, The Anatomy of Melancholy (1621), quoted in Philip J. Hilts, Smokescreen 185 (1996)) I. Introduction Tobacco has been an agricultural staple from the time of the first recorded European encounter with the plant in the fifteenth century.2 The pervasive nature of its cultivation and consumption has made tobacco one of the most profitable crops in world agricultural history.3 World production is estimated at thirteen billion pounds annually, originating in more than one hundred countries.4 This production has flourished, in part, due to the demand for cigarettes, the leading form of tobacco consumed in the global marketplace. The World Health Organization (WHO) has estimated that 1.2 billion people over the age of fifteen are regular cigarette smokers.5 In developed countries, 35 percent of men and 22 percent of women smoke cigarettes on a regular basis.6 In developing countries, 50 percent of men and 9 percent of women smoke cigarettes on a regular basis.7 Globally, smokers consume 5.5 trillion cigarettes every year, which translates into a consumption rate of one......

Words: 4238 - Pages: 17

Tobacco Industry

...Tobacco is one of the world’s largest consumer goods industries despite pressuring environmental forces that try to diminish its market share. It has a long withstanding global history as a profitable business model rooted on a leisure activity. The use of tobacco first started to spread in the late 15th century after a crewman aboard the Christopher Columbus voyage noticed Cuban natives igniting and inhaling smoke from dried tobacco leaves.  News returned to Spain, spreading the smoking experience, which lead to the production of the world’s first cigar.  By the 1600’s the use of Tobacco reached much of Europe, Asia, Africa and North America.   Although paper cigarettes were developed around the same time as cigars, the first push for factory production came in 1881 with the issuance of a patent for a cigarette rolling machine that could produce 120,000 units daily.  By 1944, there were roughly 300 billion cigarettes produced annually.[i] However, the industry would take a turn in 1964 when the Surgeon General of the United States reported the dangers and health risks of cigarette smoking.  The tobacco industry has been combating consumer health awareness, governmental restrictions and taxes, and anti-smoking lobbying despite increased profitability ever since its introduction to the global market. Estimates place the current industry revenue at $465BN and gross profit at $280.3BN for 2010.  After taxes the estimated net profit will account for approximately 8.5%......

Words: 14792 - Pages: 60

Tobacco

...Philip Morris International (PMI), the global leader in tobacco products, is currently experiencing risks to its profitability and future operations, particularly from increasing taxes and prohibitive public policy. PMI must balance strategies which address the heightening involvement of western governments in the tobacco industry with the growth opportunities in developing markets. The following outlines the three most significant risks facing PMI and identifies existing strategies in comparison to competitors. The first significant risk facing PMI is government restrictions on advertising. Governments globally are increasingly restricting the means by which PMI can actively market to consumers. As a result, the branded tobacco industry has been limited to select sponsorship and online marketing efforts. The latest restriction involves mandating plain packaging. Australia is set to become the first country to introduce plain packaging for cigarettes in December 2012, thereby eliminating a critical brand marketing vehicle for the industry, a precedent that will have worldwide repercussions. Such measures are anticipated to expand to other regions, which restrict PMI’s ability to launch new (and differentiated) brands and to command a premium price. In the event that the tobacco product industry becomes a commodity market, with no way to differentiate other than price, production cost-reduction initiatives will serve to partially mitigate against the risk to profitability. In...

Words: 1217 - Pages: 5

Tobacco, Drugs, and Alcohol Economic Impact

...During economic hardship, many “sensitive” topics, such as tobacco, drugs and alcohol are always on the table for debate; since they influence and impact our personal lives, people’s beliefs and the economy. As the United States of America continues on its present path of accumulating a deficit, many political opinions and justification will be voiced to clarify the excessive funds allocated to aid various tobacco, drugs and alcohol programs/budgets. These programs includes, but not limited to: education and awareness; local support groups; rehabilitation centers to medical finance assistance for care and medication. The programs listed above can easily be justified by local, state and/or national government bodies, but how about monies that are being missed used and/or irrelevant in helping society, which I like to, refer them as “scam expenses”. Tobacco products in the United States have influence two major problems in today’s economy. First, in recent years, numerous state governments have enacted higher tax rates on cigarettes. The governments overall explanation of higher tariff of tobacco products would hopefully lead to a decrease smoking rates. However, some disagree and different publications note the increase in taxes was solely for the purpose of increasing revenue. Overall state tax revenue from tobacco sales have dwindled in recent years in states like New York, which presently has the highest state tax on cigarettes in the United States. At first glance,......

Words: 1310 - Pages: 6