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Tag: tax increase

  • Maine Jacks Cigarette, Cigar Taxes for 2026

    Maine Jacks Cigarette, Cigar Taxes for 2026

    As part of a newly signed budget bill, Maine will raise its cigarette taxes from $2 to $3.50 per pack, increase the taxes on cigars from 43% to 75% of the wholesale price, and boost taxes on smokeless and chewing tobacco. It also includes a provision to automatically adjust other tobacco product taxes in line with future cigarette tax increases.

    Governor Janet Mills championed the tax hikes in her 2025–2026 budget proposal, citing public health concerns and the state’s high smoking rates. Maine hasn’t increased cigarette taxes since 2005 and currently has the lowest rate in New England. This change will place Maine among the top states nationally for tobacco taxation, tying New York and Alaska for the sixth-highest rate and trailing only Utah in retail cigar prices due to its 86% uncapped rate. The new taxes begin January 5, 2026.

    According to Halfwheel, the tax hike means that a cigar with a manufacturer’s suggested retail price of $9.50 could see its tax increase from $2.04 to $3.56. A cigar priced at $16 would see its tax jump from $3.44 to around $6.

  • Study: 60% Tax Hike Would Lower Smoking, Raise Revenue in Uruguay 

    Study: 60% Tax Hike Would Lower Smoking, Raise Revenue in Uruguay 

    In Montevideo, Uruguay, a Universidad de la República (Udelaar) study projected that a 60% increase in cigarette taxes from 2025 to 2028 would reduce smoking by 19% (49,000 people) and yet increase tax revenue by 24%. The research, led by Patricia Triunfo and Zuleika Ferre, analyzed data from 1997 to 2022, confirming that Uruguay’s anti-smoking policies since 2010 have significantly lowered consumption.

    The study highlights a price elasticity of -0.47, indicating tax hikes effectively reduce demand. Smoking accounts for 15% of adult deaths in Uruguay, 16.7% of health expenditure, and 50% of smokers die prematurely.

     “Evaluating public policies is a challenge because of how they are implemented, sometimes in simultaneous layers,” said Triunfo. “The big drama is to demonstrate causality between policies and reduction of smoking.”

    The study used aggregate data on legal cigarette sales, combined with variables such as prices, income, and regulations. Their work included collaborations with Jeffrey Harris of the Massachusetts Institute of Technology (MIT) and funding from the Bloomberg Foundation.