Tobacco Taxes, Smoking Rates, and Poverty

Straight Talk

Some policies appear effective, however, economists, policymakers, and statisticians–not to mention the media–often times misinterpret the data underlying their assertions. Take, for instance, tobacco taxes, which the government levies both as a means of generating revenue and dissuading smokers from purchasing cigarettes.

Nova Scotia’s government collects $0.2352 per cigarette sold, accounting for roughly 3 to 3.5 per cent of own-source revenues (yet, revenues are trending upward). The provincial rate it third highest in Canada and double that of Ontario’s rate. In addition, the government employs several anti-smoking campaigns aimed at discouraging young adults from adopting the habit and encouraging those who already ritualize it to quit.

Graph 1 Graph 1

Smoking prevalence throughout Canada, and in most developed countries, has been decreasing significantly in recent years. Researchers disagree over what caused this decline, although most concede that education and awareness are primarily responsible. There is weaker consensus, however, about the effect of…

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