Tobacco Taxes

High cost, little benefit

Preview:

Gov. Tim Walz and other policymakers support raising tobacco taxes by claiming that high prices discourage people from using tobacco. Evidence discussed in Tobacco Taxes, however, shows that this is not the case. Smoking and tobacco use is prevalent among long-term users who are likely to be addicted and therefore less likely to change their habits due to increases in prices.

Furthermore, cigarette tax hikes create room for illicit markets by encouraging smuggling from low-tax states, effectively robbing Minnesota of business, jobs, economic activity and tax revenue. High taxes on tobacco products also fall disproportionately heavily on the poor.

If policymakers want to reduce harm and health risks associated with tobacco use, they should reduce taxes on e-cigarettes and other vaping products and forgo criminalization of such products.

A full copy of the report can be viewed here.