Vertical Equity Consequences of Very High Cigarette Tax Increases: If the Poor Are the Ones Smoking, How Could Cigarette Tax Increases Be Progressive?

Autor/inn/en	Colman, Gregory J.; Remler, Dahlia K.
Titel	Vertical Equity Consequences of Very High Cigarette Tax Increases: If the Poor Are the Ones Smoking, How Could Cigarette Tax Increases Be Progressive?
Quelle	In: Journal of Policy Analysis and Management, 27 (2008) 2, S.376-400 (25 Seiten) PDF als Volltext Verfügbarkeit
Sprache	englisch
Dokumenttyp	gedruckt; online; Zeitschriftenaufsatz
ISSN	0276-8739
DOI	10.1002/pam.20329
Schlagwörter	Low Income Groups; Smoking; Economically Disadvantaged; Tax Rates; Computation; Public Health; Taxes; Socioeconomic Status; Evaluation Methods; Behavior Change; Economic Factors + Suchen Sie Ihr Suchwort? Rauchen; Steuergruppe; Gesundheitswesen; Abgabe; Socio-economic status; Sozioökonomischer Status; Ökonomischer Faktor
Abstract	Cigarette smoking is concentrated among low-income groups. Consequently, cigarette taxes are considered regressive. However, if poorer individuals are much more price sensitive than richer individuals, then tax increases would reduce smoking much more among the poor and their cigarette tax expenditures as a share of income would rise by much less than for the rich. Warner (2000) said this phenomenon would make cigarette tax increases progressive. We test this empirically. Among low-, middle-, and high-income groups, we estimate total price elasticities of -0.37, -0.35, and -0.20, respectively. We find that cigarette tax increases are not close to progressive, using both tax expenditure-based and traditional welfare measures. This finding is robust to cross-border purchasing, generic cigarettes, and substantial external effects. However, we find that taxes can be progressive under some behavioral economic models (Gruber & Koszegi, 2004) but that these may only apply to a small share of smokers. (Contains 1 figure, 4 tables and 5 footnotes.) (Author).
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Erfasst von	ERIC (Education Resources Information Center), Washington, DC
Update	2017/4/10