What Were They Smoking When They Wrote This?

The WaPo has a feel-good article about the decline in smoking, but count us among the skeptics:

Smoking In U.S. Declines Sharply
Cigarette Sales At a 54-Year Low

Americans smoked fewer cigarettes last year than at any time since 1951, and the nation's per capita consumption of tobacco fell to levels not seen since the early 1930s, the association of state attorneys general reported yesterday.

Using data the federal government gathers when it collects taxes on cigarette sales, the group found a 4.2 percent decline in 2005 alone and an overall drop of more than 20 percent since tobacco companies reached a legal settlement with the states in 1998.

My goodness - if these results are based on tax data, shouldn't some mention be made of the possibility that folks are cheating on the taxes?  Especially since increased tax avoidance is a fairly predictable consequence of a tax increase.

Here are two straws in the wind - first, NY City noted a huge increase in bootlegged cigarettes after they raised the tax from $0.08 to $1.50 per pack.

And secondly, this national survey suggests that portion of adults who smoke leveled off in 2005 at 20.9%, the same as in 2004.  It is not clear how to compare that to the second paragraph of the article, which told us that "the group found a 4.2 percent decline in 2005 alone", but I am presuming that they found a 4.2% decline from 2004 to 2005.

Well, who knows?  Maybe smokers have not quit, but are cutting back.  Or could the under-18 set be driving this result?  Probably not -  this data (550 page .pdf), which goes to 2003, did show a drop-off of high school students who smoked from 28.5% in 2001 to 21.9% in 2003.  That said, the article tells us that "Federal studies show that about 21.7 percent of high school students still smoke, as do 20.9 percent of adults", so it appears that from 2003 to 2005 student smoking has been flat.

This strikes me as unreasonably optimistic:

Cheryl Healton, president of the American Legacy Foundation, a tobacco-control group initially funded by the legal settlement, said the continuing decline suggests that the national health goal of reducing smoking rates even further by 2010 is within reach.

"We're on target to exceed the national goal" of having no more than 15 percent of youths and 12 percent of adults smoking, Healton said. Few of the other national health goals adopted in 2000 appear to be achievable, she said, "but this is one battle we're winning."

12 percent of adults by 2010?  Has she looked at this chart?  From 1997 to 2005, the percent of adults who smoke has fallen from 25% to 21%.  Based on a 4% decline over the past eight years, she is now forecasting a 9% decline over the next four years?  Wow.

There may actually be a story here for an investigative reporter - "Hey dude, where are my tax receipts?" comes to mind.  But this article is not getting it done.

UPDATE:  But then again - one day later in the Times:

Study Says Teenagers Are Avidly Shunning Cigarettes
By SEWELL CHAN 

Smoking among New York City teenagers has shown a startling decline over the last four years, with a survey of smoking habits finding that just 11 percent of public high school students now smoke.

Mayor Michael R. Bloomberg, who announced the findings yesterday, attributed the decline to higher cigarette taxes, which have raised the price of a pack to as high as $8, and to a ban on workplace smoking. But the declines were also reflective of nationwide trends showing that teenagers are increasingly shunning smoking.

The city's study showed that 30,000 out of 280,000 high school students had smoked at least one cigarette in the last month and that the figure had fallen by half since 1997, when 23 percent of students smoked. In 2001, that proportion had fallen to 18 percent.

By comparison, the 2003 National Risk Behavior Survey, the most recent national survey available, concluded that 21.9 percent of high school students in the United States smoked. The next such survey is to be released later this year.

 

 

Comments

[topsecretk9]

if these results are based on tax data, shouldn't some mention be made of the possibility that folks are cheating on the taxes?

I could be wrong, but "smoking" is not tax deductible, so I can't see how the smokers are at fault. Smokers are only taxed at the cash register, I think.

[topsecretk9]

Oh, duh. You are talking about sellers? I think.

[clarice]

Well buyers, too..as the NY case shows they're buying from out of state over the internet.

I live in DC and never buy them here..I go across the river to Virginia.

In states with Indian tribes, people buy them there.

[topsecretk9]

Actually, when you think of those little hole in the wall ciggie marts, how do they do it?

[topsecretk9]

In states with Indian tribes, people buy them there.

Not true in CA, ask Meathead.

[clarice]

There's also a substantial blackmarket. And then, if you must, roll your own.

[Soylent Red]

That's what I do sometimes Clarice. Got a whole Clint Eastwood thing to it...

[topsecretk9]

So this why I am chagrin at meathead...why base a program on a select few that will seek to thwart that?

Believe me I am all against punishing a section of people by way of a tax, but I am also super against it to fund an entitlement program I am fundamentally against in the first place!

For one, um when are kids supposed to be kids? I'm all for repealing the age limits on when kids should enter kindergarten, let alone state funded pre-school.

I was diligent kindergarten volunteer, the problem was ---behavior vs. curriculum

They had way too many kids not ready and the kids they did have ready, the circuliam was way too much for them.

[Syl]

The taxes on cigarettes are shameful. They punish poor smokers. Furthermore, the promises as to how the extra tax revenue would be used were totally ignored.

Is there one penney of tax money going to fund addiction research? Nope.

Is there one penney going to lower the cost of health insurance? Nope.

Smokers are paying a penalty TWICE for every cigarette they smoke. First in taxes, second in health insurance.

There's something that stinks about this, and it ain't the smoke.

[Seixon]

Having switched between Norway and the USA for some years now, my anecdotal observation: Americans are smoking more than 5 years ago, Norwegians are smoking less.

I get the feeling that smoking is starting to fizzle here in Norway. It's just not all that cool. What is starting to be cool, though, is tobacco products other than cigarettes.

[Seixon]

Syl,

So stop smoking for crying out loud. You don't have to smoke, and thereby pay the taxes, and have poor health. Poor people don't have to smoke.

[Gary Maxwell]

Seixon

Having spent part of my past summer in Denmark, Norway and Sweden I will remark that it would be hard for Scandinavian to smoke more. For a group of extremely friendly people who love the outdoors, I was appalled at the high level of smokers.

But I do agree totally with your other comment on smoking. I pay 0% taxes on cigarettes. Ask me how!

[clarice]

The Government should pay me to kee p on smoking. It's the only thing some days that keeps me from biting off peoples' heads.

[Sue]

Clarice,

ROTFLMAO!!!!

[Sue]

Clarice,

I read an article by Noah Feldman. Any relation?

[tim maguire]

Seixon, there are lots of things the poor don't have to do. Does that mean it's ok for the government to tax the bejeebers out of them? Do the poor only have a right to do things they absolutely need to do?

[clarice]

Sue, No. But Michael (Whatda Ya Know) is my brother in law.

[clarice]

OT--But fun --Drudge:

BOOK SALES SOS:

CARVILLE/BEGALA BOOK BUST, 'TAKE IT BACK' SELLS 17,734 COPIES SINCE JAN. RELEASE, ACCORDING TO NIELSEN'S BOOKSCAN;

WONKETTE ANA MARIE COX 'DOG DAYS' 5,383 COPIES SOLD...

DAILY KOS 'CRASHING THE GATE' ONLY 253 COPIES PURCHASED, NIELSEN CLAIMS...

Another Moral victory for the Kosman

[nittypig]

Altria's domestic tobacco revenues for 2004 were up 3%. Since 2000 they are down 8% (18.9 b$ to 17.5 b$). Altria by itself is a big chunk of the market. I couldn't get the 1998 numbers in 2 minutes on their web site. But I'd be surprised if their revenues are down 8% while industry revenues are down 20%. Admittedly I miss a couple of years, and it's certainly possible that manufacturers are jacking up prices. But it would be simple to get that information from public sources to see if this report can hold any water.

And of course Altria may be increasing it's revenues in other countries as smuggling increses.

[cathyf]

The Government should pay me to keep on smoking. It's the only thing some days that keeps me from biting off peoples' heads.

I dunno, do the peoples' heads need bitin' off? (Sort of like in those southern states where "Wall, he needed kellin!" is a defense to a murder charge.)

Reminds me of an old GWI joke about America's secret weapon special forces elite troop, women with PMS. "Meaner than spit and retain water like a camel." Forget airport security, our best protection against terrorist hijackers is not allowing smoking on airplanes. It ensures that ~20% of the people on a random flight are just itching to kill somebody, and nobody better get outta line...

cathy :-)

[clarice]

cathyf, I really like the way you think.

[danking70]

Well this will just kill a number of State budgets...

Guess these States will have to make up the shortfall with a tax on breathing.

In Chicago, Hizzoner just raised taxes on a pack $1.00. But Indiana and Wisconsin aren't too far away. People will always find cheaper alternatives; internet, indians, friendly States, OPs...

[rez]

I'd wager nobody makes more off tobacco than government. At some point it will no longer be the best interest of "the many" to encourage people to quit because it's a huge source of revenue for the cheeeldren.

[clarice]

I sent the url for TM's note to the editors of the WaPo suggesting if they still had any investigative reporters on the staff they might want to assign someone to look at this.

(BTW last week they alone published a report that 1200 Iraqis had been killed in the "civil war". This was a figure greatly at odds which everyone else's. Today they ran a big piece suggesting the morgue wasn't accurately reporting. No correction just whining I guess.(Why not send their genius Fromkin over there to get to the bottom of it>)

[nittypig]

rez,

Why bet when you can look it up?

Per Altria's 2004 annual report

http://www.altria.com/AnnualReport/ar2004/2004ar_06_0208.aspx

Altria sold 187.1 billion cigarettes in the USA. Their revenues on those cigarettes were 17.511 billion, or $2.81 a pack. The profit on those cigarettes (messy because it depends how they allocate costs) was 4.405 billion or 70.5 cents a pack.

Per tobaccofreekids.org, federal excise tax is 39 cents a pack, and average state tax is 70 cents a pack. (They put average price at $2.61 a pack, which implies that Altria prices $0.20 higher than average, which is believable).

Anyway that means that according to Altria's numbers they make the same amount per pack as the states, and the feds make half as much as they do.

So it is possible that Altria makes more money than the state on cigarettes depending on how Altria allocate their costs. But the combined state and federal take is definitely larger than Altria's.

Altria is definitely the most profitable manufacturer, and they say that they have a 49.8% share of the domestic cigarette market (excluding internet and direct mail sales, and implicitly the black market).

However, I wonder about some of TM's argument. The data presented here are based on federal tax receipts. Federal cigarette taxes are much harder to avoid than state taxes - online merchants have to pay the federal taxes although they don't pay the state taxes. So the NYC example isn't all that useful - it's very easy for New York's smoker to get their cigarettes from outside the city, but outside of smuggling it's impossible get cigarettes without paying the federal tax.

I think the data in this report represent some lowering of consumption together with an increase in smuggling. But one of the effects of massive state taxes is that the effect of the federal tax isn't as much. When online cigarettes cost only a little more than black market cigareets (well $0.30 isn't that low, but compared to $1.50 it's not THAT much) people may be encouraged to use online retailers rather than significantly shadier black market vendors. So the states might actually be improving the federal tax take by encouraging people to go online (while certainly hurting their own).

[larwyn]

Love Sue's comment on the danger to terrorists on the now "no smoking" flights.

Always thought it was absolutely crazy to make prisons/jails no smoking - wonder if anyone has tracked incidents of violence pre/post smoking bans.

Clarice's
"BOOK SALES SOS:"
1) I'll have to check if CSPAN promotes any of these on their weekend schedule by interviewing or just broadcasting a book signing event. Think Wonkette was already on.

2)Love to be the fly on the wall at the focus groups that will try to figure out where marketing/PR went wrong on these books.

3)Think value of data mining Amazon
will be finding Independents and Republicans who buy "un-conservative values" books, magazines, music etc. Not much value in the friends, relatives and Soros purchases of the books you cited.

[clarice]

Some people said the difference is that Kos' was released later, which it was. But a comparison of sales in the same time frame of the others shows KOS is still far behind. And Glenn Reynolds Army of Davids had a huge advance sale ,something KOS' didn't.

[teqjack]

Re taxes, Congress has twice (or perhaps a third time recently) voted to not allow sales tax on interstate internet sales.

BUT -

Several states have shrugged this off, and gone to using the Excise Tax. For example, I could buy cigarettes from a site for $10.80 per carton of ten packs - and the Excise on the carton is $23.50.

Several companies have shut down their web sites rather than try to comply with supplying data on their consumers` purchases. Just as was predicted if Sales taxes aplied on internet sales.

Worse may be on the way. Want to sell something on EBay for $10? At least one state is considering legislation that you would have to first have an auctioneering license - at $500.

[M. Simon]

Tobacco is an anti-depressant.

The anti-tobacco craze is a drug company plot.