Daily Doc: PM, Jan 12, 1990: Raising Taxes Promotes Quitting, Reduces Consumption
Daily Doc: Raising Taxes Promotes Quitting, Reduces Consumption
Title: Effect of California State Tax Increase on Consumption Per Day, Quitting Rates and Packings Smoked, 880000-89---- (1st 3 Quarters)
PM, Jan 12, 1990
Bates #: 2045440173/0179
December 26, 2000
According to Philip Morris' surveillance in California after the 1989 cigarette tax increase, raising cigarette taxes is an extremely effective way to reduce overall cigarette consumption and promote quitting. Here's what PM found:
"Effective January 1, 1989, the California cigarette tax rate was increased from 10 cents per pack to 35 cents...Relative to smokers in other states, Californians reduced their cigarette consumption [and] increased their quit rates... Californians smoked fewer cigarettes per day in 1988 than others in the rest of the country and even fewer in 1989 than 1988. The difference in their consumption rates between the years is almost three times as large as the difference for the rest of the sample...Californians also quit smoking more frequently than those in the rest of the country."So, both pro-smoking and anti-smoking forces agree that raising taxes on cigarettes is a highly effective way to promote public health--and it produces revenue for the government (or for more anti-smoking programs) to boot.
This data should go a long ways towards encouraging more states to raise cigarette taxes.
CITATION
Title: Effect of California State Tax Increase on Consumption Per Day, Quitting Rates and Packings Smoked, 880000-89---- (1st 3 Quarters)
Type of Document: Memo
Author: Martin, PG (Philip Morris)
Recipient: Johnston, ME
Date: 19900112
Site: Philip Morris Tobacco Company document site http://www.pmdocs.com/
Page Count 7
Bates No. 2045440173/0179
URL: http://www.pmdocs.com/getallimg.asp?DOCID=2045440173/0179
Litigation Usage: None yet
Found Using Search Criteria: "quitting & report" (on Philip Morris site).
QUOTES
Effective January 1, 1989, the California cigarette tax rate was increased from 10 cents per pack to 35 cents. Since the sales tax is calculated including the cigarette tax, this resulted in an increase of 27 cents per pack, representing a price increase of over 20 percent.
This memo reports on an investigation of the responses to the price increase of the ...panelists residing in California compared with those who are residents of other states.
Panelists were selected for investigation if they had answered brand update questionnaires in both 1988 (pre-tax) and 1989 (post-tax) calendar years. In other words, these are the same people one year apart...
The specific areas of study were changes in the number of cigarettes smoke per day, quitting rates and brand switching.
Relative to smokers in other states, Californians reduced their cigarette consumption, increased their quit rates, and accelerated their switching to price values.
Consumption Rates, 1988-89
Californians smoked fewer cigarettes per day in 1988 than others in the rest of the country and even fewer in 1989 than 1988. The difference in their consumption rates between the years is almost three times as large as the difference for the rest of the sample...
Californians also quit smoking more frequently than those in the rest of the country.
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