$1 Cigarette Tax in Wisconsin Leads to Record Number of Calls to "Quit-Line"

This is an interesting story about the success of a program in Wisconsin, where a $1 cigarette tax lead to more people trying to/actually quitting. But, before I get into that, I'd like to share my point of view on tobacco and taxes. I'm for taxes on tobacco as a way of diversifying the family farming industry in North Carolina. I'm also against growing tobacco because it is an immoral crop - a crop that leads to addiction, pain, agony, and finally death. It kills more people than drunk drivers, it kills more people than heroin, it kills more people than Osama bin Laden, it ruins more lives than gambling or fornication or adultery or taking the Lord's name in vain. It is immoral.

The only reason we allow its growth is to make rich, white men richer and because it is the only good, addictive drug that we grow here in the US. As Chris Rock says:

God forbid some brown people got wealthy... We can't have that! Because drugs come from brown countries. We can't have no wealthy brown people!
...
If drugs were legalized, there would be a drug spot in every corner. It wouldn't be a Starbucks. It'd be Weedbucks. McDonald's? McCokeald's. Krispy Kreme? Kracky Kreme.

Chris Rock is probably right, if rich, white men could grow poppy here or could take over a place where it was grown, say Afghanistan, and reap profits while killing off their customers. I'm sure they would.



Taxing tobacco, here's my take:

  1. North Carolina produces almost three-quarters of the flue-cured tobacco grown in the United States.
  2. About 95% of this tobacco is used for cigarettes.
  3. However, much of the tobacco produced in North Carolina is turned into cigarettes in other states or countries, meaning North Carolina loses the financial, manufacturing impact of the tobacco.
  4. North Carolina is 32nd in cigarette tax, which means 31 other states earn more in taxes from our tobacco than we earn.
  5. States use that tobacco tax money to improve their schools, infrastructure, health, and other aspects that make them more attractive to new businesses.
  6. Michigan has brought in over $1 BILLION each year based on their $2/pack cigarette tax. That is a tax based almost entirely on the tobacco grown here in North Carolina and turned into cigarettes outside North Carolina.

My analysis? We get screwed when it comes to tobacco. But, not just through loss of profits, but through loss of family farming. Farming in North Carolina has been tied to tobacco for so long that the fortunes of this community are tied to smoking - an immoral twist for such a moral population of folks.
Indeed, things are only getting worse, because the rise in cigarette production in the US is over.

us-cig-production

The picture is more bleak than this graph suggests, because the amount of tobacco consumed is actually going down even faster.

total-tobacco-consumed

Why? Because the tobacco is used in cigarettes, supposedly, but in fact cigarettes have less and less tobacco each year.

tobacco-content-of-US-man-c

So, tobacco farming is dying in North Carolina. Add to that the end of the federal tobacco program and what you are left with is an end to a way of life in North Carolina, and a chance at a new beginning.


What happened in Wisconsin
?

Madison -- A $1-per-pack increase in the cigarette tax went into effect on Jan. 1, and in the first week of the increased tax, 9,000 smokers contacted the Wisconsin Tobacco Quit Line, according to Gov. Jim Doyle. That's about equal to the number of calls in an average year; typically, an average of 200 people call the line every week.

That gives Doyle more fodder for another part of his anti-smoking plan - enacting a statewide smoking ban in all work places, including restaurants and bars. Nearly half the states in the nation have such bans in place."We know which way history is going," Doyle said in a statement. "The Legislature should act so that Wisconsin does not become the ashtray of the Midwest." Legislative leaders indicated Wednesday the chances of a smoking ban passing the Legislature this session are slim.

So, we tax cigarettes at $2 per pack, we make $1 BILLION a year for awhile. What do we do with that money? We put it into renewable, organic, sustainable family farming. We could give GRANTS of $10,000 a year to 100,000 family farms for 6 years. Or, we could give grants of $100,000 to 10,000 family farms, assuming $1 billion in taxes each year.

In fact, it is really really hard to find good numbers about cigarette sales in North Carolina - go ahead, google it. But, I have found that in 2005, North Carolina per capita cigarette sales of 94 packs (Jeebus, that is a lot considering how many people don't smoke). At that time, there were 8,683,242 people living in North Carolina, according to the Census. So, that means that we sold....wait, this can't be right....

816,224,748 MILLION packs of cigarettes. Alone. Just cigarettes. Wow. So, tack $2 onto each pack and you get a Family Farming Fund of $1,632,449,496 EACH YEAR. Just from cigarettes, not including any other taxable sources of tobacco. That means we could give grants of $100,000 to more than 15,000 family farms each year.  There appears to be about 50,000 family farms in North Carolina. We could give every family farm about $20,000 a year for several years to make the transition from tobacco to food crops. Within ten years, if every penny of that money went to helping small, family farmers then North Carolina would be the world leader in local, organic, sustainable agriculture.

There would be a number of health benefits.

  1. Kids would stop smoking.
  2. Adults would stop smoking.
  3. The excess food created from the 10,000 family farms could be sold at cost to local schools. There would be a guarantee of sale and our kids would get fresh food. Yummie, imagine that!!!

It's win, win, for everybody except.....

(Click picture to play short film)

Comments

Sensitive topic for NC

I have to say, I agree with your premise - tobacco has turned into an immoral crop, if anything is an immoral crop. I'd like to see the family farmer who grows tobacco given viable alternatives to keep the farm going and growing.

I want to give this post the full attention it deserves, and I'm at work right now and can't. I'll be back this evening.

Be the change you wish to see in the world. --Gandhi

It doesn't have to be sensitive.

I think the majority of tobacco farmers in North Carolina, if given a choice between raising a cash crop that kills people and a cash crop that doesn't, would choose the one that doesn't. I know there is a lot of nostalgia for when tobacco kept the economy rolling along, but look at those graphs, tobacco is dying in North Carolina. Being replaced by cheap tobacco (with decent quality) from Brazil and other places. The manufacturing is moving overseas as well. What is there to be nostalgic about?

Wayne Uffelman began his farming life growing tobacco. Today, he and his wife Ruth and their daughters Amelia and Julie Claire, are still growing tobacco…organically. They also specialize in the organic production of mixed vegetables, three varieties of potatoes, and heirloom corn varieties on their 50 acre Blue Hill Organic Farm on Paw Paw Creek in Madison County. This year they decided to branch out to chicks and free-range egg production - currently 600 chickens roam the pastures of Blue Hill Organic Farm.

Wayne and Ruth are creatively looking for new ways to make farming viable in western North Carolina.

Alan Souther is a tobacco farmer from Alleghany County. He enjoys farm life and would like to think that someday he’ll pass his land on to his children. But tobacco quotas, a farmer’s share of the tobacco market, have declined by almost 50% over the past five years, threatening the economic stability of many farms and leaving growers like Souther wondering how to keep things going.

Souther needed some way to make his farm economically sound. After some searching, he decided the best way to assure his farm’s future is to look to the past. Alleghany County was once a major sheep producing area, and Souther believes that it could be again. But Souther needed some help in making his dream a reality.

That’s where the RAFI-USA came in. RAFI’s Tobacco Communities Reinvestment Fund was started in 1997 to help tobacco farmers and community groups start alternative enterprises. According to a continuing study of 1236 tobacco farmers conducted by RAFI and Wake Forest University, farmers said that lack of capital, markets, processing and profitability stand in the way of replacing tobacco income with other enterprises. The Tobacco Communities Reinvestment Fund addresses those issues through a cost-share grant program. Souther received one of those grants to help with start-up costs for his new sheep operation.

One of the pitfalls of childhood is that one doesn't have to understand something to feel it. - Carlos Ruiz Zafon

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.
-me

I do not agree with you

These taxes are the most regressive taxes around. And the fact is most of the poor are not going to quit they will try to absorb the cost.

I disagree with your premise.

I grew up "blue-collar" and the idea that poor people don't want to quit smoking is ludicrous. However, if you had said "poor people are not going to be able to quit", then I might agree. Because poor people have real stress in their lives and drugs help alleviate or displace that stress. It's hard to quit the "one thing" that makes you feel good.

Regardless of what you think, that Wisconsin study shows that a whole years worth of people wanted help quitting in the first week. Also, this increase would lead kids to not START smoking.

And, to tell you the truth, I don't really care if a tax on smoking is regressive. There was a study that showed the true cost of a pack of cigarettes is $222.

This article estimates the mortality cost of smoking based on the first labor market estimates of the value of statistical life by smoking status. Using these values in conjunction with the increase in the mortality risk over the life cycle due to smoking, the value of statistical life by age and gender, and information on the number of packs smoked over the life cycle, produces an estimate of the private mortality cost of smoking of $222 per pack for men and $94 per pack for women in 2006 dollars, based on a 3 percent discount rate. At discount rates of 15 percent or more, the cost decreases to under $25 per pack.

Now, I think, a lot of this is due to the fact that smokers lose productivity and life-span. I'm not sure if this includes the massive increase in insurance premiums I pay so that people can smoke and die a slow, painful death from emphysema. Or, a quick, painless death from a stroke.

So, regressive in this case is just fine with me.

BTW, Australia is getting serious about quitting. This ad of theirs is just too disgusting for me to post.

One of the pitfalls of childhood is that one doesn't have to understand something to feel it. - Carlos Ruiz Zafon

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.
-me

I quit in 1996

Most of my friends who smoked then still do and the cost continues to rise. As for if they really want to quit who knows, the fact is few do. And it is one of if not the most regressive tax around, and I do not support it.

Do you support paying for their diseases?

Do you support paying subsidies to grow tobacco for cigarettes instead of a food crops?

Do you support children smoking?

One of the pitfalls of childhood is that one doesn't have to understand something to feel it. - Carlos Ruiz Zafon

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.
-me

People do quit because of the cost

I know several people who say they were glad for the extra incentive for quitting they had due to the rising price of cigarettes.

I can't imagine anything MORE appropriate to tax than tobacco. Also, despite the fact that I enjoy wine (lots!), I think it, too, is an appropriate subject for taxation.

The costs to all of us that stem from alcohol and tobacco use (and this cost is shared by those who don't use either) make the idea of taxing these products a no brainer.

All that is necessary for the triumph of evil is that good men do nothing
-Edmund Burke

Well ...

The economic analysis leaves out the growing market in China.

And I'm surprised that you didn't talk about how a decrease in smoking reduces health care costs for everybody (at least not in the main post). If we get rid of smoking, fatty foods, suing doctors with junk science, the last two months of peoples' lives, and administrative overhead (did I miss any that I've heard on the campaign trail this year?)... we just might be able to afford health care for all - assuming we invest in health creation and not health care.

1 Thessalonians 5:21: But examine everything carefully; hold fast to that which is good.

I always wanted to be the avenging cowboy hero—that lone voice in the wilderness, fighting corruption and evil wherever I found it, and standing for freedom, truth and justice. - Bill Hicks

China doesn't matter.

Tobacco production is moving overseas, just like everything else. The only family farming that will succeed in the global community is "local" production. There is a lot out there on the subject and I've just dipped my toe into it.

Smoking probably increases health care costs more than all those other things combined (and yes I'm guessing because I'm too busy to go dig it up). I'm frankly shocked that you would throw out "suing doctors with junk science" as a reason for high health care costs.

One of the pitfalls of childhood is that one doesn't have to understand something to feel it. - Carlos Ruiz Zafon

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.
-me

How can you say that?

China is a huge market ... even if other producer-states were able to increase their market share, China and other markets will create a demand that new producers won't be equipped to keep up with. And there will always be a worldwide premium market for American cigarettes.

I think obesity (though tied sometimes to smoking) is now a bigger health care risk, or will be on the horizon.

And though I was just casually throwing off reasons I heard on the campaign trail, rising practitioner insurance costs affect the job market for doctors, increasing their overhead and increasing their demand by decreasing the number of MDs in practice. They also increase the incidence of "precautionary" procedures that are more likely unnecessary. Though, of course, it's not in the top 4.

1 Thessalonians 5:21: But examine everything carefully; hold fast to that which is good.

I always wanted to be the avenging cowboy hero—that lone voice in the wilderness, fighting corruption and evil wherever I found it, and standing for freedom, truth and justice. - Bill Hicks

Well, dang, you're right.

China is a huge market, I guess that is why Detroit is doing so well. And, the steel industry in Pennsylvania, and the coal mines. And, the textile mills here in the South.

Oh, wait....

One of the pitfalls of childhood is that one doesn't have to understand something to feel it. - Carlos Ruiz Zafon

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.
-me

big difference

That is apples to oranges.

Cigarettes are cheap. Cars are not.

And PA steel did great when we first opened up trade with China. The problem (for us) is that they used all that steel to create their own manufacturing base, and so they can now create their own stuff.

"Keep the Faith"

"Keep the Faith"

I guess you're right...

if only there was a cheap commodity we could compare. Sheets, linens, t-shirts, underwear, drapes, pretty much any textile ever made in North Carolina. How about coal? Regardless of what folks think, the facts are that North Carolina tobacco will be out-competed by flu-cured tobacco from other countries. There will still be tobacco production, but look at the graphs, the use of NC tobacco is steadily decreasing.

One of the pitfalls of childhood is that one doesn't have to understand something to feel it. - Carlos Ruiz Zafon

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.
-me

Fair Enough

I didnt want to take sides between you and Sam, I just didnt like the analogy.

"Keep the Faith"

"Keep the Faith"

Some more numbers...

tobacco production

1965 - 1844 Million Pounds
1990 - 1626 Million Pounds
2000 - 1053 Million Pounds
2007 - 710 Million Pounds

Total stemmed flue-cured tobacco imported into the US

2007 - 185.2 Million Pounds
Percent change since 2006 = 117%
Brazil 2007 - 145 Million Pounds
Percent change since 2006 = 221%

One of the pitfalls of childhood is that one doesn't have to understand something to feel it. - Carlos Ruiz Zafon

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.
-me

The beginning of the OP

The beginning of the OP reminded me of the episode of The Office where Michael does that one Rock bit. I then imagined Robert doing it. Good stuff.

I don't think China has anything to do with this either.

After reading through the OP again, and reading all the comments, I don't think a $1 a pack tax is a bad idea at all, especially if part of that revenue is put into accessible, affordable smoking cessation programs for people who want to quit but can't.

Our health insurance company will cover treatment for all kinds of substance abuse, except for tobacco. (Idiots.)

My great uncles and cousins on my mother's side of the family were tobacco farmers. They've switched to soy and peanuts. I don't know if it's organic or not.I actually called my cousin to find out what he thought about it. He says it's not quite as profitable, but it's enough to keep the farm and he doesn't feel guilty about selling peanuts. Then he laughed and said "Even though the neighbor's kid is allergic to peanuts." He also noted that it doesn't smell as good as tobacco. I asked if he thought the farm (in Greene County) was safely in the family. His response: "Hell, yeah! When are you bringing that little commmie son of yours out here for a visit?"

Don't you love anecdotes instead of empirical evidence?

So - that's what I think.

Great topic, Robert, thanks.

Be the change you wish to see in the world. --Gandhi

I wonder how many tobacco farmers will be loyal...

when the local convenience store is selling cigarettes with almost no tobacco from North Carolina? Oh, wait, I guess they won't be tobacco farmers anymore at that point.

Soy and peanuts are a good alternative I guess. I know that some time ago I read about a company that was trying to express human hormones in tobacco, because it has one of the highest bioyields/acre and it has been made so pest-resistant. THAT would make tobacco a real cash crop.

One of the pitfalls of childhood is that one doesn't have to understand something to feel it. - Carlos Ruiz Zafon

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.
-me

Wow.

Human hormones from tobacco! I never would have expected that. Wouldn't they be tobacco hormones? (just kidding - sometimes science is just magic to me.)

Before tobacco became a scourge, it had (and still does) folk medicine uses. It still takes the "sting" out of a bee sting faster than anything I know when applied directly to the sting. I'm sure that there are many medical uses that could be developed from the crop, if we could use it that way instead of for cigarettes.

By the way - does anyone know if it's legal in NC to sell cigarettes by the piece? One at at time out of a package? There's a small store here that does that and I've always wondered. I'm not going to narc on them, I just wanted to know.

Be the change you wish to see in the world. --Gandhi