Newest tax hits smokers

Published 12:00 am Monday, April 13, 2009


Louisiana smokers may have more motivation to kick the habit thanks to new laws that call for an increase in taxes on cigarettes and other tobacco products.

As of April 1, the federal government raised the per-pack tax on cigarettes from 39 cents to $1.01, pushing the full price of one pack well over $7 in some locations.

The move is a push by President Barak Obama, a former smoker himself, to expand healthcare coverage for low-income kids, but it has some smokers and a few business owners feeling the pinch.

“They [regular customers] complain a lot about the increase, but they are still buying them just as much as they used to,” said John Fruge, manager of the RaceTrac gas station at Airline and U.S. 51. “A lot of my regular customers say they try to quit every time the price goes up, but it usually doesn’t stop them. Our sales have stayed steady.”

Ray J. Adams, manager of Birdie’s Food and Fuel on Belle Terre Boulevard, tells a bit of a different story.

Since the increase went into affect, Adams said his store has seen a decrease in overall sales per day, and that decrease could be attributed to less cigarette sales.

“Nine out of 10 customers complain, and I’ve had some complain so much that we have to end up voiding their sale because they refuse to pay that much for cigarettes,” Adams said. “We have also seen a decrease in our regular cigarette orders.”

Adams used the example of Kool and Marlboro, two of his more popular cigarette brands. He said when those two brands stay in stock with no new order from one Friday to the next something is definitely up.

The federal tax on a pack of cigarettes has gone up six times, each time by no more than a dime until now. This latest increase is by far the largest since the tax was introduced in 1951 at 8 cents per pack. The cigarette pinch could get even worse for Louisiana smokers if one state lawmaker has her way.

State Rep. Karen Carter Peterson, D-New Orleans, said she is sponsoring a bill in the upcoming session of the Louisiana Legislature that calls for a $1 raise in the state’s tobacco tax.

If Peterson’s bill passes, Louisiana’s tax on tobacco would jump from 36 cents, which ranks 45th in the nation, to $1.36 per pack of cigarettes.

Peterson said the new tax, which could produce nearly $200 million a year, would help fill a $2 billion gap in the state’s budget and could possibly save lives by encouraging smokers to curb their habit.

“This tax will prevent new smokers, discourage those who are casual users and encourage those who need cessation programs to seek help,” Peterson said in a recent article in New Orleans CityBusiness. “In the end, we all win by reducing a dangerous behavior.”

State lawmakers tried to pass a similar tax in 2005, which failed after a vote by the state senate. Gov. Bobby Jindal has said that he would probably veto any tax increase that makes it to his desk.

At this time last month, a carton of cigarettes averaged about $30 at stores in the St. John area. With both tax increases factored in, that same carton could end up costing about $47 following both hikes, an increase that may be too much for some pack-a-day smokers.

“It’s breaking me,” said Peggy Sasso of LaPlace, who was shopping at Birdie’s Thursday. “At over $6 a pack, I am scared to add up how much I spend. I may have to start thinking about giving it up.”