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Tobacco taxes rise

Smokers say they may not be able to afford to keep buying cigarettes after price hike

Posted: March 30, 2009 11:10 p.m.
Updated: March 31, 2009 4:59 a.m.

Kim Cissel, 50, of Studio City, has a smoke at the California Institute of the Arts campus Monday afternoon. If Cissel's smoking habit gets too expensive, he's considering quitting.

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Tobacco users face a double hit as a 1 percent state sales-tax increase and the single largest federal tobacco tax hike both take effect Wednesday.

Tobacco companies are trying to turn the situation to their advantage. The major cigarette makers unashamedly raised prices a couple of weeks ago, partly to offset any drop in profits once the per-pack federal tax climbs from 39 cents to $1.01.

"This increase has been the most recognized and argued (increase), so I think it's going to have a big impact on whether people want to quit or not," said Tony Sayegh, owner of Smokin' Aces Cigar Shoppe in Newhall. "I've never (seen) a price increase like this where people turned around and walked right back out."

Saugus' Kwik Stop Liquor owner, Roy Hannoun, said he's almost embarrassed to have to sell cigarettes for such a hefty price and warn customers that another increase is coming.

"People are telling me now, (they) can't afford to keep smoking," he said.

Tobacco taxes are soaring to finance a major expansion of health insurance for children. President Barack Obama signed that health initiative soon after taking office.

"If you're going to raise money for a cause, don't pick on one group," Hannoun said.

But Hannoun thinks the federal government will eventually "get away with it" because, he said, most "smokers are going to smoke anyways." According to CalArts dance student and smoker Zahra Banzi-Horn, "when you're addicted, you're addicted."

"I think a lot of people who smoke socially probably won't anymore, but if you're addicted, you'll probably find a way around it," she said. "I'm going to start rolling my cigarettes."

Banzi-Horn, of Santa Clarita, said that for the same price she could buy a pack of 20 cigarettes, she could instead purchase bulk tobacco and roll 50 to 100 smokes of her own.

Christina Zych, 22, said the hit to her wallet is just another symptom of her habit - the first sign was revealed to her when she was ticketed more than $400 for tapping ash out her car window.

"It's frustrating that taxes on everything are going up," she said. "I'll probably start rolling my own (cigarettes) - it's cheaper."

Public health advocates, longtime foes of the tobacco companies in the nicotine battles, are turning the situation to their own advantage.

About one in five adults in the United States smokes cigarettes, but an American Heart Association official said tax hits typically chisel at that number.

The tax increase "is a terrific public health move by the federal government," said Dr. Timothy Gardner, president of the American Heart Association. "Every time that the tax on tobacco goes up, the use of cigarettes goes down."

Eric Lindblom, research director of the Campaign for Tobacco-Free Kids, said he expects a drop of at least 6 to 7 percent among young smokers.

"We are certainly hopeful that health care reform will include some more increases," he said.

Kim Cissel, found puffing on a smoke at California Institute of the Arts Monday, said the tax hike might just push him to do what he's wanted to do for years - quit.

"It certainly would be a nudge to get me to be healthier," said Cissel, 50. "I'm not ready (to give up smoking) today but maybe in a few weeks. You have to set your mind to another group of behaviors."

Sayegh, whose store revenue is mostly generated through cigar sales, isn't too concerned about the impact of the tax increases to his business. He doesn't expect cigar users to pay much attention to the hike.

"It's already a luxury. Any real cigar smoker is going to ask about the quality before they ask what the price tag is," Sayegh said.

So have the stockpiling rushes begun for tax-hike evaders? Maybe, but if so, Sayegh hasn't seen it.

"People have no money to stock up, the same for us as a retailer," he said.

The Associated Press contributed to this report.

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