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Originally posted by slingshot Yea, cigarette prices are definately not going down. I just had to write a paper for one of my econ classes on this subject. To sum it up in a nutshell.....if taxes aren't raised cigarette manufactures will take advantage of the pricing room and increase prices themselves. Even with the steady increase in taxes cigarette manufactures have continued to post record profits. Our government however is inclined to raise taxes as it significantly raises tax revenues as well as lowers long term healthcare costs. Raising the price by 10% will result in a 4% decrease in consumption which in the long run would save the government ~$400 million in healtcare costs. Not to mention a decrease in the productivity loses due to smoking as well as a decrease in the required amount of hospital beds devoted to tobacco related diseases. If the NDP were to have been elected, taxes would have increased by 17%. To throw some other statistics out there....2 out of 3 Ontarians support an increase in tobacco taxes so raising the tax wouldn't exactly hurt the political standing of any party which chooses to do it.

I haven't bought a pack a cigarettes from a store in ages.....$10 a carton is all I pay. The cost of cigarettes go up and down all the time. When I started univeristy in 1993 the cost of a pack was almost $10.00 and by the time I finished university the price was $4.00. Eventually the government will lower the taxes on cigarettes because of the amount of money they loose out on from stolen and "black market" cigarettes.

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Scott has been introduced to the rave scene, and Ecstasy, by Craig. The two of them go out on the weekends, with some of Craigs friends, and stay up all night, dancing in a drug-fueled trance.

Last edited by Moral Hazard on Apr-26-2011 at 07:48

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We are the kids of the quiet revolution, and we fight for a new quiet concept of evolution. We play house music.

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Originally posted by ChemEnhanced I haven't bought a pack a cigarettes from a store in ages.....$10 a carton is all I pay. The cost of cigarettes go up and down all the time. When I started univeristy in 1993 the cost of a pack was almost $10.00 and by the time I finished university the price was $4.00. Eventually the government will lower the taxes on cigarettes because of the amount of money they loose out on from stolen and "black market" cigarettes.

Highly unlikely. The reason for the reduction in price back than was due to a massive tax rollback on tobacco taxes in 1994. Cigarettes are just now reaching the prices of back than. It's very unlikely that taxes will come down again. While the government may begin to lose money on tax revenue, it will be offset in health care savings as well as a deduction in productivity loses due to tobacco related diseases in our economy. The productivity loses that result from tobacco related diseases are far greater than the actual tax revenue collected by the government. It's not like people just switch to black market cigarettes everytime the price of cigarettes increase. Increases in price cause a significant amount of people to stop smoking. You're telling me a large portion of people aren't going to use an increase in price as an incentive to quit? Read up on some studies dude.

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We are the kids of the quiet revolution, and we fight for a new quiet concept of evolution. We play house music.

^Your posts have made me reconsider my previous assumption.

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Originally posted by slingshot Highly unlikely. The reason for the reduction in price back than was due to a massive tax rollback on tobacco taxes in 1994. Cigarettes are just now reaching the prices of back than. It's very unlikely that taxes will come down again. While the government may begin to lose money on tax revenue, it will be offset in health care savings as well as a deduction in productivity loses due to tobacco related diseases in our economy. The productivity loses that result from tobacco related diseases are far greater than the actual tax revenue collected by the government. It's not like people just switch to black market cigarettes everytime the price of cigarettes increase. Increases in price cause a significant amount of people to stop smoking. You're telling me a large portion of people aren't going to use an increase in price as an incentive to quit? Read up on some studies dude.

u so smart

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Originally posted by slingshot Highly unlikely. The reason for the reduction in price back than was due to a massive tax rollback on tobacco taxes in 1994. Cigarettes are just now reaching the prices of back than. It's very unlikely that taxes will come down again. While the government may begin to lose money on tax revenue, it will be offset in health care savings as well as a deduction in productivity loses due to tobacco related diseases in our economy. The productivity loses that result from tobacco related diseases are far greater than the actual tax revenue collected by the government. It's not like people just switch to black market cigarettes everytime the price of cigarettes increase. Increases in price cause a significant amount of people to stop smoking. You're telling me a large portion of people aren't going to use an increase in price as an incentive to quit? Read up on some studies dude.

Taxes will come down again at some point....its a cycle that continues to happen. Actually, people do switch to black market cigarettes becuase of price increases......a larger portion of the smoking population are more likely to find cheaper cigarettes then actually quit smoking.....The people most likely to quit smoking because of cost are highschool kids and university kids.....the health care savings are not going to be seen for another 30-40 years.

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Scott has been introduced to the rave scene, and Ecstasy, by Craig. The two of them go out on the weekends, with some of Craigs friends, and stay up all night, dancing in a drug-fueled trance.

Last edited by Moral Hazard on Apr-26-2011 at 07:48

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Originally posted by ChemEnhanced Taxes will come down again at some point....its a cycle that continues to happen. Actually, people do switch to black market cigarettes becuase of price increases......a larger portion of the smoking population are more likely to find cheaper cigarettes then actually quit smoking.....The people most likely to quit smoking because of cost are highschool kids and university kids.....the health care savings are not going to be seen for another 30-40 years.

Ok, so following your logic and for the sake of this argument let's throw some numbers in here. Say for every 10% increase in the price of cigarettes, 5% of smokers will switch to black market cigarettes. So in theory, if the price of cigarettes went up by 200%, 100% of smokers would switch to black market cigarettes? While this is just a hypothetical, extreme case example....the amount of black market cigarettes that can flood the market has an upper limit. This isn't prohibition. Smoking is not going to increase as the price skyrockets. While the percentage of people who switch to black market cigarettes in response to an increase the price of cigarettes is diminishing as the price increases, it DEFINATELY has an upper limit. What i'm trying to say here from my last couple of posts is that the economic benefits that result from constant price increases far outweigh the steady decline in tax revenues.

Long term health care savings + Long term productivity increases > Long term decline in tax revenue.

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We are the kids of the quiet revolution, and we fight for a new quiet concept of evolution. We play house music.

Last edited by slingshot on Nov-02-2007 at 19:07