Wednesday, March 18, 2009

They say the end of the world will come when we're all having nic fits

Major tobacco companies, which expect to sell fewer cigarettes under the new tax laws, have already raised prices to boost revenues ahead of next month's federal increase. The propossed state tax on cigarrettes could range from $.07 to $1.00, this new state tax would come on top of a recently enacted 62-cents-per-pack federal cigarette tax hike. The costs don't stop there. Companies who retail tobacco products feel the need to "keep up" with these rising costs. If the product sales at lets say $2.5 and the profit is $.25 then why would they sale the same product at $5.13 and keep their profit at $.25. The price for a single pack of cigarrettes could look something like this; Base price $4.46 + retail markup $.50 + state tax $1.00 + federal tax $.60 = total amount $6.65 depending on your area.

The extra taxes would help fund health programs. Some hope it will affect smoking habits.