Wednesday, March 25, 2009

Federal Cigarette Tax to go up 62 Cents a Pack

From The Dallas News:

Lighting up in Texas – already a costly habit because of the state cigarette tax – is about to get more expensive.

A 62-cent federal tax increase on cigarettes starts April 1, but tobacco companies began raising prices this month in anticipation of the higher tax.

A big jump in the federal excise tax on cigarettes – from 39 cents a pack to $1.01 – is now being factored into prices charged by the major tobacco companies in advance of the April 1 effective date of the new rate.

Coupled with the higher state tax – $1.41 a pack – that went into effect two years ago, Texas smokers are paying $6 to $6.50 a pack for the more popular brands of cigarettes and hitting the $50 mark for a carton of the leading brands.

It's making some smokers wonder how much they're willing to pay.

Friday, Plano residents Mallory Carrick and Zach Mayer pulled casual drags from their cigarettes on a crowded Austin street corner, lamenting the tax hike just now hitting their pocketbooks.

"First we have to deal with the economy, and now the government," Carrick said. "I guess it's better that it's on cigarettes 'cause they're killing us, but still, what about our freedom?"

In town for the South by Southwest Music Festival, Carrick and Mayer said they're not heavy smokers, spending about $30 a week between them. But with the spread of local smoking bans, relatives battling cancer and now higher taxes, the 22-year-olds have plenty of reasons to stop.

Ronnie Freeman has been a smoker since 1973. Before the latest increase, he paid $4.75 for a pack of his favorite, Kool. Now he's paying a dollar more.