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Why Do Cigarettes Cost So Much?: The increase in cigarette prices in recent years is due mainly to two things: (1) high state cigarette taxes and (2) the multibillion dollar tobacco settlement against the major cigarette manufacturers. Due to a myriad of taxes, a carton of cigarettes can cost $38.83 in California. You can still find cheap cigarettes if you are willing to buy brands from manufacturers who were not part of the tobacco settlement and if you buy from online retailers who do not charge high state taxes.  Federal and State taxes mark up your cigarette sale.

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Tax increases and price hikes are unlikely to be very effective at keeping cigarettes away from kids. The latest evidence from Cornell University is that the price elasticity of demand -- which measures how sales volume changes in response to price changes -- is roughly zero for teens. That is, within reasonable limits, teens will smoke about the same number of cigarettes no matter what the price. Indeed, government statistics show an increase in underage smoking in seven of eight states that have recently raised their cigarette taxes. And in the United Kingdom, where cigarettes are twice as expensive as they are here, the smoking rate for kids is the same as ours.

To put the teen smoking problem in perspective, 44 million adult consumers are being asked to pay higher prices for a perfectly legal product because retailers sell cigarettes to 1 million kids, violating laws on the books in all 50 states. The way to keep cigarettes from kids is to enforce those laws. We should prosecute retailers who sell to minors, demand proof of age and prohibit vending machine sales where youngsters are the primary customers. Instead, our governors and our president persist in their attack on a deep-pocketed and unpopular industry -- apparently unconcerned that the extraction of yet more money from smokers' pocketbooks is plain and simple theft.  Wholesale cigarettes save you money.

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Avoid High Taxes!

Highest State
Cigarette Taxes
Massachusetts $1.51
New York $1.50
New Jersey $1.50
Washington $1.43
Rhode Island $1.32
Michigan $1.25
Hawaii $1.20
Pennsylvania $1.00

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