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So how much tax money that 1% pay for cigarettes? I’ll bet that it’s significantly larger than $2.6B

by dingi 3y ago

phoronixrly 3y ago
How about how much tax money will be gained from having alive and healthy people earning money and paying taxes? I bet it's going to be more than whatever cigarette tax will be lost...
- ComputerGuru 3y ago
  Not if the smoking cohort is concentrated in older, retired members of the population.
  - jeffbee 3y ago
    It's not. Smoking among those over 65 has always been relatively rare. It used to be that the highest rates were among those under 30 but those younger adults today don't want tobacco and the current largest cohort of smokers is middle-aged. Less than 10% of over-65 Americans smoke tobacco according to various surveys.
  - phoronixrly 3y ago
    Look around you, do you see only old sick people smoking? Also at this study (for Spain): https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6813084/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6813084/ > Deaths due to lung cancer represented the 28.90% and the 10.83% of all cancer-related deaths in 2017 in males and females respectively, with an increasing tendency in this last group. In addition, the YPPLL count increased in the study period among females. Lung cancer was responsible annually for 60,846 YPPLL, and productivity losses summed €13.1 billion over the 10 year period.
- lostlogin 3y ago
  In New Zealand we tax tobacco heavily. It is thought that smokers save the government money - they pay a lot of tax and die early. https://www.nzherald.co.nz/nz/smokers-save-govt-cash-says-report/FYUXTPA456UAK3KNA5RFYRL62U/ https://www.nzherald.co.nz/nz/smokers-save-govt-cash-says-re...
  - dingi 3y ago
    This is true for my country as well. Govt taxes cigarettes around 1000%. I'm not kidding, that's a thousand percent tax. Our govt essentially runs on smokers and drinkers tax money.
mattw2121 3y ago
30 million people smoke $1.50 per pack tax (1.01 fed, giving high estimate for state taxes) 2 packs a day (high) (30,000,000 x 1%) x (1.5 x 2) x (2 x 365) = 657,000,000 You'd need 4% to quit to even out.
- avelis 3y ago
  #TheyDidTheMath
- photonerd 3y ago
  To add onto this (given the actual numbers of ~11 billion collected) you’d actually need 23.63% to quit to lose the same revenue as you’d save with just 1% quitting. Of course if you had nearly a quarter quit you’d save even more, so…
photonerd 3y ago
You’d lose that bet. State and local governments collected $19 billion in revenue from tobacco taxes in 2020. Which was high. In 2022 it had dropped to a more normal level of $11.26 billion. 1% of that is $11 million. Quite a difference.
- deleted 3y ago
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- deleted 3y ago
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- xyzzy4747 3y ago
  1% of 11 billion is $110 million. To go from a million to a billion, you multiply by 1000. Same to go from 1 to one thousand or one thousand to one million. It’s also easy to remember since the commas are every 3 decimal places. 1/1000 is equivalent to 0.1%, not 1%.
  - photonerd 3y ago
    Indeed, a typo, my apologies. The point that it is a LOT less than 2 billion stands however
- MightyBuzzard 3y ago
  Your math is bad. 1% of recipients is nowhere near the same as the 1% of smokers you used.
  - photonerd 3y ago
    It’s assuming the 1% of smokers who are recipients are evenly distributed (statistically speaking) across the smoking population. A quite reasonable assumption. Therefore, to generally reduce the population of recipients you’d have to reduce the population of smokers. Unless you have data showing a specific population skew or sampling issue I’d say it is perfectly good math, albeit with an assumption. Now, of course, you could simply deny service to 1% of smokers who would be recipients—or other extremely skewed sampling attacks—but that is somewhat unlikely and in most cases directly against the goals of the program.
jeffbee 3y ago
The entire tobacco tax revenue in 2022 was only $11 billion. At the margin, the proposed reduction in smoking would only reduce revenues by ~$400 million while saving $2.6 billion. That's clearly profitable.

So how much tax money that 1% pay for cigarettes? I’ll bet that it’s significantly larger than $2.6B

by dingi 3y ago

So how much tax money that 1% pay for cigarettes? I’ll bet that it’s significantly larger than $2.6B

How about how much tax money will be gained from having alive and healthy people earning money and paying taxes? I bet it's going to be more than whatever cigarette tax will be lost...

ComputerGuru 3y ago
Not if the smoking cohort is concentrated in older, retired members of the population.
- jeffbee 3y ago
  It's not. Smoking among those over 65 has always been relatively rare. It used to be that the highest rates were among those under 30 but those younger adults today don't want tobacco and the current largest cohort of smokers is middle-aged. Less than 10% of over-65 Americans smoke tobacco according to various surveys.
- phoronixrly 3y ago
  Look around you, do you see only old sick people smoking? Also at this study (for Spain): https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6813084/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6813084/ > Deaths due to lung cancer represented the 28.90% and the 10.83% of all cancer-related deaths in 2017 in males and females respectively, with an increasing tendency in this last group. In addition, the YPPLL count increased in the study period among females. Lung cancer was responsible annually for 60,846 YPPLL, and productivity losses summed €13.1 billion over the 10 year period.
lostlogin 3y ago
In New Zealand we tax tobacco heavily. It is thought that smokers save the government money - they pay a lot of tax and die early. https://www.nzherald.co.nz/nz/smokers-save-govt-cash-says-report/FYUXTPA456UAK3KNA5RFYRL62U/ https://www.nzherald.co.nz/nz/smokers-save-govt-cash-says-re...
- dingi 3y ago
  This is true for my country as well. Govt taxes cigarettes around 1000%. I'm not kidding, that's a thousand percent tax. Our govt essentially runs on smokers and drinkers tax money.

mattw2121 3y ago

30 million people smoke $1.50 per pack tax (1.01 fed, giving high estimate for state taxes) 2 packs a day (high) (30,000,000 x 1%) x (1.5 x 2) x (2 x 365) = 657,000,000 You'd need 4% to quit to even out.

avelis 3y ago
#TheyDidTheMath
photonerd 3y ago
To add onto this (given the actual numbers of ~11 billion collected) you’d actually need 23.63% to quit to lose the same revenue as you’d save with just 1% quitting. Of course if you had nearly a quarter quit you’d save even more, so…

photonerd 3y ago

You’d lose that bet. State and local governments collected $19 billion in revenue from tobacco taxes in 2020. Which was high. In 2022 it had dropped to a more normal level of $11.26 billion. 1% of that is $11 million. Quite a difference.

deleted 3y ago
[deleted]
deleted 3y ago
[deleted]
xyzzy4747 3y ago
1% of 11 billion is $110 million. To go from a million to a billion, you multiply by 1000. Same to go from 1 to one thousand or one thousand to one million. It’s also easy to remember since the commas are every 3 decimal places. 1/1000 is equivalent to 0.1%, not 1%.
- photonerd 3y ago
  Indeed, a typo, my apologies. The point that it is a LOT less than 2 billion stands however
MightyBuzzard 3y ago
Your math is bad. 1% of recipients is nowhere near the same as the 1% of smokers you used.
- photonerd 3y ago
  It’s assuming the 1% of smokers who are recipients are evenly distributed (statistically speaking) across the smoking population. A quite reasonable assumption. Therefore, to generally reduce the population of recipients you’d have to reduce the population of smokers. Unless you have data showing a specific population skew or sampling issue I’d say it is perfectly good math, albeit with an assumption. Now, of course, you could simply deny service to 1% of smokers who would be recipients—or other extremely skewed sampling attacks—but that is somewhat unlikely and in most cases directly against the goals of the program.

jeffbee 3y ago

The entire tobacco tax revenue in 2022 was only $11 billion. At the margin, the proposed reduction in smoking would only reduce revenues by ~$400 million while saving $2.6 billion. That's clearly profitable.