How to Save on Tax Rates on Cigarettes in the USA April 12, 2006
So the title is a bit misleading, but I was reading an article in the New York Magazine about the three year anniversary of the smoking ban, and whether or not it has been good for business. None of the restaurants interviewed think that the ban in restaurants and bars had a negative impact. I’m not a smoker myself, so I don’t mind this law. But reading this got me thinking that if you smoke, you’re cigarette expense must add up with all the taxes on it. It’s been said that taxes on cigarettes is the best smoking cessation program. Here in NYC, tax rate on cigarettes is $1.50, and in NJ it’s even higher at $2.40. (Here’s a cigarette tax rate table by State in Jan 2006.)
Rhode Island has the highest cigarette tax at $2.46 per pack. I don’t know how much packs cost, but I’m sure $7 is normal for NY area. How much does a pack a day smoker spend per month? That’s an extra $200 per month on cigarettes. The cigarette tax in Canada is even higher than in the US. In Canada, between 63% and 79% of the price of a package of cigarettes is tax. In New York, by comparison, the tax on cigarettes is 38%.
I’m sure smokers hear it from their non-smoking friends and family, so I’m not going to emphasize the health implications of smoking, but if you are a smoker in debt, cutting down on the smokes should save you a lot of money. Is that why some smokers always seem to ask to borrow a cigarette? I wonder if many personal finance bloggers are smokers?
Sources:
State Excise Tax Rates on Cigarettes
New York Magazine article
The cost of smoking (Canada)