A Significant Cigarette Tax Rate Increase in North Carolina Would Produce a Large, Sustained Increase in State Tobacco Tax Revenues

State cigarette and other tobacco tax revenues are among the most predictable, steady, and reliable revenues that states receive. While these revenues do decline gradually over time as smoking and other tobacco use declines, the reductions in revenue are modest, predictable and more than offset by the related reductions in public and private sector health care and other economic costs caused by smoking.

This paper explores how North Caroline could use increases in cigarette tax rates to reduce smoking, improve population health, and save money.