The Tobacco Tax A WIN, WIN, WIN for KENTUCKY Political Win Fiscal Win Health Win

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  • The Tobacco TaxA WIN, WIN, WIN for KENTUCKYPolitical WinFiscal WinHealth Win

  • Tobaccos Toll in Kentucky7,700 tobacco-related deaths annually23,800 kids try first cigarette each year6,800 additional kids become regular daily smokers every year107,000 kids alive today will die from tobacco use24.5% of Kentucky high school students are current smokers23.1% of high school males are current spit tobacco users

  • Tobaccos Economic Tollin Kentucky$1.5 billion in annual health care costs related to tobacco use

    $487 million in Medicaid costs alone

    Kentucky taxpayers pay $602 per household to treat tobacco-related disease

  • TOBACCO EXCISE TAXESA win for public health

    A win for state budgets

    A win among voters

  • The single most direct and reliable method for reducing consumption is to increase the price of tobacco products, thus encouraging the cessation and reducing the level of initiation of tobacco use National Academy of Sciences Institute of Medicine 1998

  • It is clear that price has a pronounced effect on the smoking prevalence of teenagers and that the goals of reducing teenage smoking and balancing the budget would both be served by increasing the Federal excise tax on cigarettes. Myron Johnson Philip Morris Research Executive 1981

  • price&prev70-06

    37.41.9990215685

    19711.9861891909

    19721.9656906345

    19731.9037682643

    37.11.8197723739

    19751.7500975705

    19761.7442334521

    19771.7316936309

    34.11.7581823117

    33.51.6793968431

    33.21.5729664406

    19811.4950393686

    19821.5521787526

    32.11.7422520023

    19841.8906095574

    30.11.8951402352

    19861.9601102124

    28.82.0353825075

    28.12.1089031517

    19892.213411677

    25.52.3173683974

    25.72.376511021

    26.52.5660657492

    252.5515374872

    25.52.3570775383

    24.72.374500057

    19962.3666433492

    24.72.3856577847

    24.12.5041442706

    23.52.8931423266

    23.23.5473694091

    22.73.6859459353

    22.43.9245013439

    21.64.1355627462

    20.94.047695339

    20.93.9683438625

    20.83.9730319279

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    Prevalence

    Price

    Year

    Prevalence

    Price (Jan. 2007 dollars)

    Cigarette Prices and Adult Smoking Prevalence, United States, 1970-2006

    Sheet1

    yeartotal salesnational per capita salesadult per capita salesmedian price (11/1/t-1), no genericsmedian price (11/1/t-1) inc genercpi (11/t-1)cpi (11/t-1) Jan 2007 basereal median price 11/t-1 no genericsreal median price 11/t-1 with genericsest. FY real price, no genericsest. FY real price with genericsest. 4/1 real price, no genericsest. 4/1 real price with genericsest. 7/1 real price, no genericsest. 7/1 real price, with generics12th grade 30 day smoking prevalence10th grade 30 day smoking prevalence8th grade 30 day smoking prevalence12th grade daily smoking prevalence10th grade daily smoking prevalence8th grade daily smoking prevalenceadult smoking prevalence

    197023894.3126.737.137.137.50.1852620346$2.00$2.00$2.00$2.00$2.00$2.00$1.99$1.9937.4

    197124842.1132.438.938.939.60.1956367086$1.99$1.99$1.99$1.99$1.98$1.98$1.98$1.98

    197225716.4131.6404040.90.2020591258$1.98$1.98$1.97$1.97$1.96$1.96$1.94$1.94

    197326303.3135.140.340.342.40.2094696071$1.92$1.92$1.90$1.90$1.89$1.89$1.87$1.87

    197427259.9141.741.841.845.90.2267607304$1.84$1.84$1.82$1.82$1.80$1.80$1.78$1.7837.1

    197527665.1134.944.544.551.50.2544265275$1.75$1.75$1.75$1.75$1.75$1.75$1.75$1.7536.726.9

    197628378.2145.347.947.955.30.2731997471$1.75$1.75$1.74$1.74$1.74$1.74$1.73$1.7338.828.8

    197728669.4138.949.249.2580.2865386135$1.72$1.72$1.73$1.73$1.74$1.74$1.76$1.7638.428.8

    197828943.2140.954.354.361.90.3058058651$1.78$1.78$1.76$1.76$1.75$1.75$1.73$1.7336.727.534.1

    197928775.2141.156.856.867.40.3329776302$1.71$1.71$1.68$1.68$1.66$1.66$1.64$1.6434.425.433.5

    198029184.3139.9606075.90.3749703581$1.60$1.60$1.57$1.57$1.55$1.55$1.53$1.5330.521.333.2

    198129979.9139.8636385.50.4223974389$1.49$1.49$1.50$1.50$1.50$1.50$1.50$1.5029.420.3

    198229978.1137.969.769.793.70.4629080705$1.51$1.51$1.55$1.55$1.58$1.58$1.63$1.633021.1

    198329243.4126.3177.781.981.9980.4841514505$1.69$1.69$1.74$1.74$1.78$1.78$1.83$1.8330.321.232.1

    198428461.7121.6170.394.794.7101.20.4999604774$1.89$1.89$1.89$1.89$1.89$1.89$1.88$1.8829.318.7

    198528464.2119.6162.197.897.8105.30.5202157932$1.88$1.88$1.90$1.90$1.91$1.91$1.92$1.9230.119.530.1

    198628044.2117.5156.6104.5104.51090.5384949806$1.94$1.94$1.96$1.96$1.97$1.97$1.99$1.9929.618.7

    198727547.3114.4152.9110.1110.1110.40.5454114299$2.02$2.02$2.04$2.04$2.05$2.05$2.06$2.0629.418.728.8

    198827026.7110147.9118.9118.9115.40.5701130345$2.09$2.09$2.11$2.11$2.12$2.12$2.15$2.1528.718.128.1

    198926165.9105.6141.7129.5129.5120.30.5943206071$2.18$2.18$2.21$2.21$2.24$2.24$2.27$2.2728.618.9

    199024994.3100.8137.5144.1144.1125.90.6219864042$2.32$2.32$2.35$2.32$2.37$2.32$2.40$2.3229.419.125.5

    199124221.296.5129.9161.1153.3133.80.6610149395$2.44$2.32$2.50$2.38$2.54$2.41$2.60$2.4728.320.814.318.512.67.225.7

    199223783.294.8127.9182.4173.5137.80.6807762232$2.68$2.55$2.73$2.57$2.76$2.58$2.80$2.6027.821.515.517.212.3726.5

    199323368.593.1124.1201.1183.71420.7015255711$2.87$2.62$2.77$2.55$2.71$2.51$2.61$2.4429.924.716.71914.28.325

    199422995.690.6122.1179.1169.3145.80.7202987906$2.49$2.35$2.50$2.36$2.50$2.36$2.51$2.3731.225.418.619.414.68.825.5

    199523245.289.5121186.8175.8149.70.7395660422$2.53$2.38$2.52$2.37$2.52$2.37$2.52$2.3733.527.919.121.616.39.324.7

    199622973.187.7118.4190.7179.6153.60.7588332938$2.51$2.37$2.51$2.37$2.51$2.37$2.50$2.373430.42122.218.310.4

    199723045.586.9116.9195.5185.4158.60.7835348984$2.50$2.37$2.52$2.39$2.53$2.40$2.55$2.4236.529.819.424.618924.7

    199822755.585.8116.8205.5195161.50.7978618291$2.58$2.44$2.64$2.50$2.68$2.54$2.74$2.6035.127.619.122.415.88.824.1

    199921972.882.1110.8228.7217.51640.8102126314$2.82$2.68$3.03$2.89$3.18$3.03$3.39$3.2434.625.717.523.115.98.123.5

    20002140577.4104.3305.2292.6168.30.8314560114$3.67$3.52$3.70$3.55$3.73$3.57$3.76$3.5931.423.914.620.6147.423.2

    200120727.273.799.2327.5312.4174.10.8601098727$3.81$3.63$3.87$3.69$3.92$3.72$3.98$3.7829.521.312.21912.25.522.7

    200220434.971.796.4356.7337.2177.40.8764129318$4.07$3.85$4.16$3.92$4.22$3.98$4.31$4.0526.717.710.716.910.15.122.4

    200319336.367.991.3396.6372.2181.30.8956801834$4.43$4.16$4.42$4.14$4.42$4.12$4.41$4.1024.416.710.215.88.94.521.6

    200418921.965.187.6401371.5184.50.9114892103$4.40$4.08$4.38$4.05$4.36$4.03$4.34$4.0025169.215.68.34.420.9

    200518590.475.084.5407.23741910.9436012963$4.32$3.96$4.32$3.97$4.32$3.97$4.32$3.9823.214.99.313.67.5420.9

    200618100.87181.2422.2388.8197.60.9762074144$4.32$3.98$4.31$3.97$4.30$3.97$4.29$3.9621.614.58.712.27.6420.8

    425.6392.6201.50.995474666$4.28$3.94

    202.416

    Frank J. Chaloupka:based on state fiscal years ending June 30, in millions of packs, source Tax Burden 2001

    Frank J. Chaloupka:from Tax Burden on Tobacco, for fiscal year ending June 30

    Frank J. Chaloupka:from Tax Burden on Tobacco, for fiscal year ending June 30

    Frank J. Chaloupka:price generally as of 11/1; with some exceptions; from Tax Burden on Tobacco

    Frank J. Chaloupka:generic price series begins 11/1/90; earlier years exclude generics, from Tax Burden on Tobacco

    Frank J. Chaloupka:from Bureau of Labor Statistics, All Urban Consumers, not seasonally adjusted, 1982-84=100

    Frank J. Chaloupka:data in "G" divided by 7/05 to put in July 2005 terms

    Frank J. Chaloupka:"E" series divided by "H" series

    Frank J. Chaloupka:"F" series divided by "H" series

    Frank J. Chaloupka:weighted average of 11/1/t and 11/1/t-1 prices to get estimate of average price for fiscal year, assumes linear trend in price

    Frank J. Chaloupka:weighted average of 11/t and 11/t-1 prices to get estimated price for fiscal year, assumes linear trend in price

    Frank J. Chaloupka:weighted average of 11/t and 11/t-1 prices to get estimated price for middle of first two quarters of year t

    Frank J. Chaloupka:weighted average of 11/t and 11/t-1 price to get estimated price in middle of first two quarters of year t

    Frank J. Chaloupka:from Monitoring the Future surveys; www.monitoringthefuture.org

    Frank J. Chaloupka:from Monitoring the Future surveys; www.monitoringthefuture.org

    Frank J. Chaloupka:from Monitoring the Future surveys; www.monitoringthefuture.org

    Frank J. Chaloupka:from Monitoring the Future surveys; www.monitoringthefuture.org

    Frank J. Chaloupka:from Monitoring the Future surveys; www.monitoringthefuture.org

    Frank J. Chaloupka:from Monitoring the Future surveys; www.monitoringthefuture.org

    Frank J. Chaloupka:from various CDC/MMWR reports on adult smoking prevalence, including http://www.cdc.gov/tobacco/research_data/adults_prev/prevali.htm for data from 1970 through 1994, http://www.cdc.gov/tobacco/research_data/99gaso.htm#cigsmoking for data from 1995 and 1997, http://www.cdc.gov/tobacco/research_data/adults_prev/ccmm4939_fact_sheet.htm for data from 1998, and http://www.cdc.gov/tobacco/research_data/adults_prev/mm5040.htm for data from 1999, and preliminary data for 2000 and 2001. Note that changes to the survey over time make trend comparisons difficult; a major change, for example, was the inclusion of some day smokers in the estimates after 1992 - in 1999, for example, some day smokers were 4.3% while every day smokers were 19.2%; this likely explains the apparent rise in smoking prevalence from 1991 to 1992.

    Frank J. Chaloupka:early est.-june

    Chart3

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