Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Quick Hits: Thank You For Smoking


Brief scrutiny of today's headlines.


In an effort to spare lungs and raise money to support anti-smoking campaigns, New York state officials are preparing to introduce a cigarette tax hike of $1.25.

According to, this brings total taxes on cigarettes in New York State to $2.75 (or $4.00 in New York City) -- the highest in the nation -- and raises the price of smokes more than 20% to $6 or more per pack.

Raising prices to curtail smoking has a track record. According to a study by the American Cancer Society, a 10% increase in the price of cigarettes was followed by a 6.5% decrease in underage smoking and a 2% drop in the habit among adults.

Beyond being a disincentive to a foul habit, price hikes lead to increased revenues for the state. The results of a 2006 Tax Burden on Tobacco study revealed a $1 increase on cigarettes sold in Montana generated $25.1 million in tax revenue - in spite of a decline in sales of 17.8%. New York state lawmakers expect to raise $265 million in additional revenue for anti-smoking and health programs.

Still, some die-hard smokers will dodge the price increases, opting to stock up in nearby Pennsylvania, where a pack of cigarettes costs less than $4.50, including state taxes of $1.35.

While some are willing to pay top dollar their vice, others already affected by high gas and food prices are considering quitting or cutting back. According to Morningstar, Reynolds American (RAI), Loews Carolina Group (CG) and Altria (MO) have to "balance the retail price of [their tobacco products] with the economic trends affecting many of their core customers," a task made more difficult in the face of higher cigarette taxes.

What's good news for health is bad news for Big Tobacco.

For more on cigarettes, check out Hoofy & Boo's always astute report.

< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos