New York Governor Proposes Controversial Tobacco Tax Increase

Jan.16.2023
New York Governor Proposes Controversial Tobacco Tax Increase
New York proposes raising cigarette tax and banning flavored tobacco products, with concerns over increased criminal activity and little evidence of reduced smoking rates.

On Tuesday, New York Governor Kathy Hochul announced a proposal to increase the state cigarette tax by $1 and ban all flavored tobacco products. Currently taxed at $4.35 per pack, the state loses over $1 billion in tobacco tax revenue to illegal smuggling, the highest in the country. Governor Hochul's plan to raise the tax rate to $5.35 will result in more revenue leaving the state, with no evidence that the increase will have any impact on reducing smoking rates. Additionally, the proposal raises serious concerns about criminal justice and police brutality.


New York's cigarette tax, the highest in the country, has led to 53.5% of cigarettes being purchased illegally in the state in 2020, according to the latest statistics. This is yet another area in which New York continues to lead the nation. Since 2006, the state has seen a 190% increase in its tobacco tax rate, as part of efforts to crack down on illicit tobacco sales. Governor Hochul has cautioned against further taxation, as this would potentially place more power in the hands of illicit operators in the tobacco black market.


The tobacco smuggling in the United States is mainly operated by tightly organized and highly dangerous international criminal groups. The US State Department recognizes tobacco smuggling as a "threat to national security" because this low-risk, high-return activity provides these criminal groups with huge profits, which they use to engage in human trafficking, money laundering, and terrorist activities.


Governor Hochul's proposal not only poses a serious national security risk, but also fails to effectively reduce smoking rates. 72% of smokers come from low-income communities, and data from the national adult tobacco survey consistently shows that increasing tobacco tax does not significantly impact smoking rates among those with annual household incomes below $25,000. This misguided proposal, during an unprecedented period of inflation, will only burden low-income New Yorkers even further. With many families still grappling with the aftermath of the COVID-19 pandemic, increasing the economic burden for nicotine addicts is incredibly cruel.


A peer-reviewed study from 2012 found that wealthy New Yorkers only spend 2% of their income on cigarettes each year, while poor New Yorkers spend nearly a quarter (23.6%) of their income on cigarettes. Governor Hochul and the New York Legislature cannot ignore the disproportionate impact that this tax increase will have on the state's most vulnerable populations.


In addition to raising taxes, the proposal also includes a ban on flavored tobacco. Removing flavored tobacco products from shelves will further encourage illegal tobacco smuggling, according to many, including ATR, who warn that the ban on flavored tobacco will exacerbate inequality in black communities by criminalizing products that are more popular among African Americans. There is reason to be concerned. Banning flavored tobacco will make all menthol cigarettes in the state tax-free, making it illegal to possess these cigarettes. In 2014, Eric Garner, a New York man who was killed by the New York Police Department, was approached by the police for allegedly selling untaxed cigarettes.


Flavored tobacco products, including mint-flavored cigarettes, flavored cigars, and little cigars, do not cause more harm to users than non-flavored tobacco products, and there is no evidence to suggest that they are more difficult to quit. Contrary to Governor Hochul and supporters of the ban, flavored tobacco products such as mint-flavored cigarettes are not popular among young people. Only 0.78% of high school students use menthol. Banning popular legal products in such a widespread manner serves no public health purpose.


If Governor Hochul and New York legislators want to truly reduce smoking, they should implement policies that allow for legal access to reduced-risk alternatives like e-cigarettes to reduce harm to nicotine users. However, New York's undemocratic flavor ban on e-cigarettes in 2020 makes this path forward seem unlikely.


However, if the governor is seeking to increase the presence of illegal cigarette and smugglers in her state while lowering taxes, then this is exactly the recommendation the state needs.



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