Without a national tracking system in place, smokers evade
taxes, there's less of a barrier to youth smoking and local
governments miss out on revenue, the authors of a new study
Kevin Davis of the nonprofit research organization RTI
International in Research Triangle Park, North Carolina, and his
colleagues calculated that the cities of Boston, Philadelphia,
New York, Providence and Washington, DC, combined, could collect
between $690 million and $729 million per year in cigarette
taxes if trafficking stopped.
"What is key about this is that these calculations are not
actual losses in revenue," Davis said. "This is money that could
be added to government income."
Davis and his team focused on five cities in the northeastern
U.S. and estimated that if New York City eliminated trafficking,
roughly 5 percent of young people there would never pick up a
cigarette in the first place and adults would decrease their
overall cigarette consumption by about 7 percent.
"Where illegal trafficking exists, taxes are not being paid, but
also the person who buys the product pays less," said Joanna
Cohen, director of the Institute for Global Tobacco Control at
Johns Hopkins Bloomberg School of Public Health in Baltimore.
She was not involved in the research.
"If there's a lower price, then there is less incentive to
reduce smoking," Cohen told Reuters Health.
"Tobacco products are deadly and kill one of every two long-term
users," Cohen said, adding, "Because each death is completely
preventable, any death from cigarette smoking is a tragedy."
Surveys on U.S. cigarette trafficking have been done before, but
"this study is giving an updated sense of how extensive the
problem remains," Cohen said.
During a three-week period in 2011, Davis and his team collected
cigarette packaging litter in specific Census tracts within city
limits and checked the local tax stamps. Cohen said this method
gives "a good sense of what is happening at the street level."
Of the 1,439 total cigarette packs collected, nearly 59 percent
lacked tax stamps that corresponded with the geographic location
where they were found.
The researchers note that some portion of those could have been
purchased in another state by individuals for their own use,
which is not illegal. With that in mind, they estimated that up
to 42 percent of the found packages were trafficked in.
In New York City, the largest single source of out of state
cigarettes was Virginia. Pennsylvania was the most significant
source of non-local packs found in Boston, Davis and his
colleagues report in the journal Tobacco Control.
In New York City, both state and city governments levy a
per-pack tax totaling $5.85, while in Philadelphia, the state
tax is $1.60.
The current federal tax on all cigarette packages is $1.01.
Three states — North Carolina, North Dakota and South Carolina — levy no tax on cigarette sales.
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The researchers estimated that the average price per pack at
the time of the study was $8.16 in New York City, $7.08 in
Boston, $7.55 in Providence, $6.13 in Philadelphia and $6.05 in
the District of Columbia.
Based on the rate of trafficking they estimated, the researchers
calculated that eliminating it would allow cities to recoup
substantial revenue: $636 million to $663 million in New York City,
about $21 million in Boston, between $5 million and $10 million in
Providence, about $2 million in Philadelphia and $16 million to $33
million in DC.
"Governments could turn around and spend that money on public health
campaigns," said Dr. Donna Shelley of NYU Langone Medical Center in
The researchers write that one possible solution to the
trafficking problem is to implement a national "track-and-trace"
system that would allow law enforcement to follow cigarette packages
from the manufacturer to the point of sale and make it easier for
them to disrupt trafficking networks.
"The track-and-trace program could be similar to tracking a UPS
package," said study co-author Susan Kansagra of the New York City
Department of Health and Mental Hygiene.
The federal Tobacco Act of 2009 gave the U.S. Food and Drug
Administration (FDA) the power to implement a nationwide
track-and-trace system. In March 2013, the City of New York
petitioned FDA to start work on such a project. Executives with the
American Heart Association and American Lung Association also
co-signed the letter.
The U.S. tobacco company Philip Morris International already
prints unique serial numbers on cigarette packages sold in Germany
and Portugal, which allows these packs to be tracked.
And, Kansagra points out, California has been using an encrypted tax
stamp system for years now, which helps to defeat counterfeit tax
stamps. Previous research has suggested, however, that
counterfeiting accounts for a small amount — about 4 percent — of
illegal cigarette sales.
Shelley agreed on the need to track cigarette packages and
emphasized that the FDA already has the power to do it. "The Food
and Drug Administration has the authority to put a track-and-trace
system in place, and they need to act on this authority," she said.
Another possible solution, Cohen said, is to equalize taxes and
close tax loopholes that incentivize cross-border smuggling in the
"If all states raised their tobacco taxes to an average level — that
would help," she said.
"We know what we have to do about this. Now it's time to act," Cohen
said. "We don't need more research. We need action."
Control, online Dec. 11
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