Cigarette tax increases can lead to more households using food stamps


For the past 20 years, local and state governments across the U.S. have increased cigarette taxes to raise billions for their revenues and to dissuade people from smoking.

But a study shows this practice may have an unintended consequence. In the households the study looked at, the tax increase also increased the probability of households applying for food assistance programs.

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UNITED STATES - JUNE 16: Jody Reavis, an employee of R.J. Reynolds Tobacco Co., a unit of Reynolds American Inc., smokes a cigarette during a demonstration against a proposal to raise cigarette taxes in Raleigh, North Carolina, U.S., on Tuesday, June 16, 2009. North Carolina, which grows the most tobacco in the U.S. and is home to Reynolds and Lorillard Inc., is one of at least 25 states where legislators are considering an increase in cigarette taxes to cover budget shortfalls. Reynolds is the second-largest U.S. tobacco company with brands such as Camel, Pall Mall, Kool, Winston, and Doral. (Photo by Jim R. Bounds/Bloomberg via Getty Images)
UNITED STATES - JUNE 16: Victoria Gordon, an employee of R.J. Reynolds Tobacco Co., a unit of Reynolds American Inc., smokes a Salem cigarette during a demonstration against a proposal to raise cigarette taxes in Raleigh, North Carolina, U.S., on Tuesday, June 16, 2009. North Carolina, which grows the most tobacco in the U.S. and is home to Reynolds and Lorillard Inc., is one of at least 25 states where legislators are considering an increase in cigarette taxes to cover budget shortfalls. Reynolds is the second-largest U.S. tobacco company with brands such as Camel, Pall Mall, Kool, Winston, and Doral. (Photo by Jim R. Bounds/Bloomberg via Getty Images)
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Researchers looked at consumer data from smoking and non-smoking households and found the average tax increase of 56 cents made a food stamp-eligible smoking household 7 percent more likely to apply for assistance.

The average smoking household in the study went through about 22 packs per month. That's an $18 increase in monthly smoking costs per $1 increase in taxes.

This also could cause problems for the federal government. While local or state governments determine most cigarette taxes, food assistance programs exist at the federal level. So, even though local governments are making money, the federal government ends up footing the bill.


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