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New York’s tax increase on cigarettes took effect on September 1, 2023, making it the highest excise tax in the United States. This is the first tax hoke since 2010, and the $1 increase now means consumers will be charged $5.35 per pack of 20 cigarettes instead of $4.35. Supporters of this change hope that the higher charges will deter more people from purchasing cigarettes. By giving smokers a financial incentive to quit, they can improve their health significantly. An analysis from the American Cancer Society Cancer Action Network and other public health organizations project that this increase will save 15,300 lives, encourage 44,800 adult smokers to quit, and save the state millions of dollars in smoking-related healthcare costs.
Why increase cigarette taxes?
Quitting smoking is challenging for different reasons, but the wide availability and affordability of cigarettes can make it harder for people to kick the habit fully. Raising cigarette prices through taxation is one of the most effective ways to discourage individuals from initiating or continuing smoking. A 10% increase in cigarette prices leads to a 4-5% decrease in cigarette consumption. Insights from the World Health Organization highlight that this reduction is particularly pronounced among younger and lower-income populations, who are more sensitive to price changes. These groups disproportionately enjoy the health and economic benefits of quitting and not starting due to the high prices of cigarettes.
Rising alternatives market
Smoking has seen a significant decline in the US and around the world due to price and tax hikes, stricter bans, and growing awareness of cigarettes’ health impacts. With increased pressure on consumers to give up cigarettes, the market for alternatives is on the rise. Since many of these products provide smokeless and tobacco-free nicotine delivery, they’ve gained an edge among consumers looking to quit and improve their health. The Global Trends in Nicotine report found that alternative tobacco products have taken a share of the total value of worldwide combustible retail sales. Tobacco-free oral nicotine saw the highest growth rate in the market, despite not being widely available before 2017.
Swedish Match led the segment’s growth, and their products, like ZYN nicotine pouches, have gained popularity with consumers. ZYN pouches were designed with the American market in mind, catering to specific tastes and preferences and eliminating the taste of tobacco and its negative health effects, making the nicotine experience more pleasant. Other alternatives, like nicotine gum, are seeing significant growth but still lack appeal to some consumers. Newer products like Blip gum are helping increase the appeal of nicotine replacement therapy (NRT) products, especially to young adults. By using hip and trendy designs, unique flavors, and access to support, the brand aids in destigmatizing quitting.
The drive to quit
New York’s $1 tax hike and the emerging market for alternatives may set the stage for major change in the country and the tobacco industry as a whole. The disadvantages and harm of cigarettes are becoming much more pronounced in terms of health and finances, especially when there are newer products that pose fewer threats to well-being and financial health.
The interest in wellness and holistic health measures has also seen much growth, and with more people looking to quit smoking, these methods may become even more popular. Our “8 Benefits of Practicing Meditation” post notes that meditation can aid in fostering mental discipline that strengthens self-control and helps identify what triggers the desire to smoke. Other than its advantages for quitting smoking, meditation also boosts physical health, sleep, and cognitive function. As such, the appeal of saving money and improving health outweighs previous reasons for smoking, propelling the drive of New Yorkers and smokers worldwide to quit.
