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Up in smoke -- New Yorkers paying average $11 for pack for cigarettes

By the CNN Wire Staff
STORY HIGHLIGHTS
  • New state law adds additional tax $1.60 per pack to existing state tax
  • New York City also has tax of $1.50 per pack
  • Smokers in the city now paying $5.85 per pack in state and local taxes
  • State hopes to raise revenue; tobacco industry fears price hike will drive smokers to black market

New York (CNN) -- New York City already had the highest cigarette taxes in the nation, and a new state law that went in to effect Thursday pushed the price of smoking even higher.

The state legislature on Monday approved a bill adding an additional state tax of $1.60 to every pack. The bill, which was signed into law by Gov. David Paterson, raised the state tax to a total of $4.35 per pack.

New York City smokers pay an additional municipal tax of $1.50 per pack, so the new tax increase means that smokers in the city will pay $5.85 per pack in taxes. That drives the average local retail price up to nearly $11 per pack, according to some estimates.

And it makes for the highest state-local tax whammy on tobacco in the country, according to the Campaign for Tobacco-Free Kids. Chicago is the runner-up at $3.66 per pack in taxes, according to the organization.

"I am about to quit because it's getting ridiculous -- who can afford this?" Coney Island resident Louis Torres, 24, said in response to Thursday's new per-pack price tag.

And that's just the kind of response anti-tobacco groups are hoping for.

But for some New Yorkers, the elevated prices are not as important.

When asked whether he would continue to buy cigarettes Jason Mallor, 40, said, "Probably. We're all puppets here." He said he has been smoking for 20 years.

Carrie Thompson, 28, reacted to the new price tag by saying, "I should quit now ... I get that cigarettes are bad. I don't understand why they are so expensive here, we're in the most expensive city."

The tax hike is aimed at generating an additional $440 million in 2010-2011 tax revenue to support health care programs.

David Sutton, a spokesman for Altria Group, parent company for tobacco company Philip Morris, said he was "extremely disappointed" with the increase that makes New York's cigarette tax "far and away the highest in the nation."

"This huge tax increase will make the present contraband cigarette crisis in New York State much worse," he said in a recent e-mail to CNNMoney.com. "And it will likely not raise the revenue projected, as it will provide even greater incentives for consumers to purchase contraband cigarettes to avoid paying these extremely high taxes and will cause further loss of business to New York retailers selling state-taxed cigarettes."

-- CNN's Monika Plocienniczak contributed to this report.

 
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