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No More Legal Roadblocks - Collect the Cig Tax Now
May 9, 2011
Statement from Donald Distasio, CEO, American Cancer Society of NY & NJ, regarding federal appeals court decision to lift stay on cigarette tax collection on reservations.
“As soon as possible. That’s when New York State should begin collecting taxes on cigarettes sold on Indian reservations to non Indians. The sooner this tax is collected, the fewer New Yorkers that will have to endure the agony of tobacco-related illness and death.
Last year, New York took the lead by enacting the highest cigarette tax in the nation at $4.35. To maximize the effect that this higher price has on reducing smoking rates, cigarette taxes need to be collected everywhere they are sold, including those sold through Indian reservations. Higher cigarette prices mean fewer smokers. We estimate that 182,000 people will quit smoking once this tax is collected.
The American Cancer Society applauds the Governor for holding his ground and patiently waiting for the legal process to unfold. A federal appeals court has validated his conclusion that the people of New York have a right to these tax dollars.”
Additional Facts:
Public Health Benefits of Collecting the Cigarette Tax On Indian Sales
Approximately 35% of smokers usually buy their cigarettes from Indian retailers.
Collecting the tax will result in a 50% price increase for these smokers
50% increase in price paid by 35% of smokers = 7% decrease in total adult prevalence = 182,000 fewer adult smokers*
182,000 fewer adult smokers = 47,320 fewer tobacco-caused deaths
Tobacco’s Impact on Health and Health Care Costs
Adult Smoking Rate, New York – 18% (2009 Behavioral Risk Factor Survey)
Number of Adult Smokers, New York – 2.6 million
Deaths caused by tobacco, New York 2006 – 25,400
New Yorkers alive with tobacco-caused illness – 570,000
Annual health care expenditures caused by tobacco, New York 2006 - $8.17 billion
Annual Medicaid expenditures caused by tobacco, New York 2006 - $5.4 billion
Annual tobacco-caused productivity losses from premature death, New York - $6.05 billion
Tobacco-caused health costs and productivity losses per pack of cigarettes sold - $21.91
Annual state and federal tax burden due to tobacco-caused expenditures - $900 per household
*How do we know a tax increase will lead to decreased consumption? A paper, (“Cigarette Demand: A Meta-Analysis of Elasticities,” by Craig A. Gallet and John A. List, published in the Journal Health Economics, V. 12, p.821-835) examined 523 published estimates of cigarette price elasticity from the academic literature. It found a median adult short-run price elasticity of 0.40 (long-run elasticity was 0.44). This means that for every 10 percent increase in price, there is a 4 percent decrease in consumption. About half the decreased consumption is due to adult smokers quitting, and half due to smokers who continue smoking at a reduced rate. We only present data on quitters.
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About the American Cancer Society
The American Cancer Society combines an unyielding passion with nearly a century of experience to save lives and end suffering from cancer. As a global grassroots force of more than three million volunteers, we fight for every birthday threatened by every cancer in every community. We save lives by helping people stay well by preventing cancer or detecting it early; helping people get well by being there for them during and after a cancer diagnosis; by finding cures through investment in groundbreaking discovery; and by fighting back by rallying lawmakers to pass laws to defeat cancer and by rallying communities worldwide to join the fight. As the nation’s largest non-governmental investor in cancer research, contributing more than $3.4 billion, we turn what we know about cancer into what we do. As a result, more than 11 million people in America who have had cancer and countless more who have avoided it will be celebrating birthdays this year. To learn more about us or to get help, call us any time, day or night, at 1-800-227-2345 or visit cancer.org.
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