While the federal tax increase on cigarettes isn’t supposed to take effect for another week, smokers are already feeling the pinch.
Since the federal tax, signed into law by President Barack Obama, Feb. 4, is imposed on manufacturers of tobacco products, the manufacturers have already begun raising their prices, said Stephen Altman, owner of Mountain/Service Distributors, a regional distributor serving parts of New York, Pennsylvania and New Jersey.
For example, Phillip Morris, a large manufacturer of tobacco products, raised its prices in February and then again a few weeks ago, he said.
According to Altman, manufacturers tend to increase their prices before the tax is imposed and spend the additional money promoting the product to ease the consumer through the transition.
The federal excise tax, which begins April 1, is intended to raise money for the State Children’s Health Insurance Program, which provides federally paid health insurance to poor, uninsured children.
“It’s kind of an oxymoron, because if you tax the product, each year less and less is consumed and one day health care will have to be funded somewhere else,” Altman said.
Carol Malik, manager of Smoker’s Choice on Route 30 in Amsterdam and a smoker herself, said she thinks these taxes on tobacco products are taking away people’s right to choose.
“I’m a smoker and I feel like that’s my choice, but with all these tax increases it’s like they are forcing people to quit and taking away that choice,” she said.
Malik’s least expensive pack of cigarettes costs $5.19, the most expensive is $8.63.
Arshad “Ali” Butt, the owner of the Qik Pik convenience store on Guilderland Avenue in Schenectady, said the cost for a carton of cigarettes went up $7.10 a few weeks ago without any warning.
Butt said he is forced to pass the additional expense onto his customers, charging an additional 71 cents per pack.
Butt said the increase has affected his sales but not by much. He said mostly people are just complaining.
Dan Finkle, owner of Johnstown-based Finkle Distributors, said he expects there will be some layoffs as a result of the imposed tax because people will stop buying cigarettes from retailers.
When the state imposed its tax increase on cigarettes last summer, Finkle said, he lost 20 percent of his unit sales.