Tax Avoidance and Evasion: Cigarette Purchases From Indian Reservations Among US Adult Smokers, 2010-2011

The effect of tobacco tax increase on price-minimizing tobacco purchasing behaviours: A systematic review and meta-analysis

BACKGROUND AND AIMS

Tobacco product excise taxes are a cost-effective method for reducing tobacco consumption, but industry pricing and marketing strategies encourage consumers to engage in price-minimizing behaviours (PMBs). We investigated the relationship between tobacco tax increases and PMBs, measuring whether PMBs intensify following tax increases, whether low-income consumers with higher nicotine dependence are more likely to engage in PMBs and whether PMBs are negatively related to smoking cessation.

METHOD

This was a systematic review with meta-analysis of cross-sectional and longitudinal studies from seven databases up to March 2023, using studies that reported any product- and purchasing-related smoking behaviours post-tobacco tax increase in a general representative population. Sixty-eight studies were quality-assessed using the Newcastle-Ottawa scale. All studies were narratively synthesized, with five studies involving 13 068-26 575 participants providing data for pooled analyses on PMBs [purchasing lower-priced brands, roll-your-own (RYO) tobacco and cartons] pre- and post-tax increases using a random effects meta-analytical model.

RESULTS

Fifty-seven studies reported on legal PMBs, and 17 studies reported illicit cigarette purchasing. Meta-analysis showed that consecutive tax increases were positively associated with purchasing RYO [odds ratio (OR) = 1.60, 95% confidence interval (CI) = 1.04-2.46], especially in higher tobacco taxing environments, with substantial heterogeneity (I2 = 96%). Lower income and higher nicotine dependence were associated with purchasing lower-priced brands and RYO, whereas higher income and nicotine dependence were associated with purchasing cartons, large-sized packs and cross-border sales. Less evidence associated illicit tobacco purchases with tax increases or PMBs with smoking cessation.

CONCLUSIONS

Tobacco purchasers' PMBs vary widely by state, country and time-period within countries. Both legal and illegal PMBs, potentially influenced by industry pricing tactics, may exacerbate health inequalities and dilute the public health benefits of tobacco tax increases.

Nicotine use among reservation-area American Indian adolescents compared with a national sample

BACKGROUND

Past research has found significant nicotine use disparities for reservation-area American Indian adolescents when compared to national levels. However, adolescent nicotine use has changed markedly, with reduced smoking and rapid increases in nicotine vaping. This study presents 2021-2022 prevalence estimates of tobacco product use, perceived harm and availability for reservation-area American Indian youth, with comparisons to the Monitoring the Future (MTF) national study.

METHODS

Participants were 8th, 10th and 12th grade students. American Indian data were 33 reservation-area schools in 2021-2022 (n=2420); MTF data were 308 schools in Spring 2022 (n=31,438). Measures were lifetime, 30-day cigarette smoking, smokeless tobacco use, and nicotine vaping; past-year nicotine vaping; daily smoking; perceived harmfulness and availability of these tobacco products. Prevalence and 95% confidence intervals were computed by grade.

RESULTS

Estimated prevalence of lifetime, monthly and daily cigarette smoking among American Indian 8th and 10th graders was higher than national levels. Nicotine vaping prevalence was similar between samples. American Indian students were less likely to report tobacco product use poses great risk, but also less likely to report tobacco products are easily available.

CONCLUSIONS

Although estimated smoking prevalence among American Indian 8th and 10th graders was higher than national levels, prevalence appears lower than reported in earlier studies, suggesting declining disparities. Prevalence of nicotine vaping among reservation-area American Indian adolescents generally mirrors the national population; however, a lower percentage reported regular nicotine vaping poses a serious risk. This discrepancy suggests a need for prevention and intervention efforts culturally tailored for this population.

HOW COMPLETE ARE TOBACCO SALES DATA? ASSESSING THE COMPREHENSIVENESS OF TOBACCO PRODUCT RETAIL SALES DATA THROUGH COMPARISONS TO EXCISE TAX COLLECTIONS

Introduction

Sales data analyses are increasingly used to guide tobacco regulatory science. However, such data do not cover specialist retailers like vape shops or tobacconists. Understanding the extent of the cigarette and electronic nicotine delivery system (ENDS) markets covered by sales data is critical to establishing such analyses' generalizability and potential biases.

Methods

Sales data from Information Resources Incorporated (IRI) and Nielsen Retail Scanner data are used to conduct a tax gap analysis, comparing state tax collections based on cigarette and ENDS sales data to states' annual 2018-2020 cigarette tax collections and monthly ENDS and cigarette tax revenue data for January 2018 to October 2021. Cigarette analyses consider the 23 US states covered by both IRI and Nielsen. ENDS analyses consider the subset of those states with per unit ENDS taxes: Louisiana, North Carolina, Ohio, and Washington.

Results

Across states covered by both sales datasets, IRI's mean cigarette sales coverage was 92.3% (95% CI 88.3-96.2%), while Nielsen's was 84.0% (95% CI 79.3-88.7%). Coverage rates for average ENDS sales were lower, ranging from 42.3% to 86.1% for IRI and 43.6% to 88.5% for Nielsen, but remained stable over time.

Conclusions

IRI and Nielsen sales data capture almost the entire US cigarette market and, while coverage rates are lower, a substantial portion of the US market for ENDS as well. Coverage rates are relatively stable over time. Thus, with proper care to address shortcomings, sales data analyses can capture changes in the US market for these tobacco products.

Tobacco industry pricing strategies in response to excise tax policies: a systematic review

OBJECTIVE

To explore what is known about the tobacco industry's (TI) price-based responses to tobacco excise tax policies and whether these vary by country income group using a systematic review.

DATA SOURCES

Studies assessing TI pricing tactics were identified via searches of five online databases using a combination of search keywords.

STUDY SELECTION

Inclusion criteria were applied by two reviewers independently who screened all search results (titles and abstracts) for possible inclusion. They identified 37 publications that reported TI pricing tactics.

DATA EXTRACTION

Study details were tabulated, and information was extracted on the country income group, population characteristics, excise tax structure, and pricing strategies.

DATA SYNTHESIS

Of the 37 publications identified, 22 were conducted in high-income countries, while 15 covered low-income and middle-income countries (LMICs). Major pricing strategies employed were: differentially shifting taxes between products (35 studies); launching new brands/products as pathways for downtrading (six studies), product promotions and different prices for the same products for different customers (six studies); price smoothing (two studies); and changing product attributes such as length/size of cigarettes or production processes (three studies).

CONCLUSIONS

While there is limited evidence to fully ascertain industry responses to tax increases, this review suggests that the TI widely uses a multitude of sophisticated pricing strategies across different settings around the world with the intention of undermining tax policies, thereby increasing tobacco consumption and maximising their profits. There is a need for further research in this area especially in LMICs so that effective policy responses can be developed.

A qualitative assessment of the perceptions and attitudes towards commercial tobacco policies and education among tribal communities in California

Background: California has the largest American Indian and Alaska Native (AIAN) population in the United States and faces several commercial tobacco related disparities. This study assessed current interest, readiness, and knowledge regarding commercial tobacco control policies in California Tribal communities.Objectives: A community readiness assessment was conducted in California Tribal communities to understand commercial tobacco policies that included: Tobacco 21 (California State, and now federal, law restricting commercial tobacco sales to age 21 and over), tobacco tax, smoke-free worksites on Tribal lands, smoke-free households, and smoke-free indoor and outdoor areas in multi-unit housing.Methods: Twelve Tribal communities participated in focus groups and interviews between 2016-2019. Content analysis was utilized to code and data were analyzed using ATLAS.ti software.Results: A total of 165 community members participated (65% female), with most expressing support for unwritten, community-based "small p" policies, (e.g., placing signage to create a smoke-free perimeter). However, there was little to no support for "big P" policies (e.g., written ordinances on smoke-free casinos, smoke-free housing). Support for tobacco product taxation varied. The importance of Tribal sovereignty and the need for tobacco prevention and cessation programs for youth were two additional topics that emerged.Conclusions: Participants supported Tribal policies and wished for outsiders to respect Tribal sovereignty in this regard. Communities are currently working to raise awareness about the dangers associated with commercial tobacco use and would benefit from the responsiveness of future funders to these requests.

Estimating the Impact of Tobacco Parity and Harm Reduction Tax Proposals Using the Experimental Tobacco Marketplace

Taxes are a demonstrably effective method to suppress tobacco use. This study examined the effects of the tobacco parity (i.e., imposing taxes equally on all tobacco products) and the harm reduction (i.e., applying taxes in proportion to the products' levels of harm) tax proposals on demand and substitution across products. A crowdsourced sample of cigarette smokers (n = 35) completed purchasing trials with increasing tax magnitudes across different tax tiers in the Experimental Tobacco Marketplace in a repeated-measures design. Products were placed in three tax tiers (high, medium, and no tax) according to each proposal's goal. The results indicated that total nicotine (mg) purchased was not significantly different between the proposals, with higher taxes yielding lower demand. However, as taxes increased, the tobacco parity proposal decreased the purchasing of all tobacco products and increased the purchasing of medicinal nicotine (i.e., the no tax tier). Conversely, the harm reduction proposal resulted in greater purchases of electronic nicotine delivery systems and smokeless tobacco (i.e., the medium tax tier). These findings support tobacco taxation as a robust tool for suppressing purchasing and suggest that differential taxation in proportion to product risk would be an effective way to incentivize smokers to switch from smoked to unsmoked products. Further studies should investigate the unintended consequences of their implementation.

Design-based single-mediator approach for complex survey data

We discuss a two-step approach to test for a mediated effect using data gathered via complex sampling. The approach incorporates design-based multiple linear regressions and a generalized Sobel’s method to test for significance of a mediated effect. We illustrate the applications to a study of nicotine dependence, race/ethnicity and cigarette purchase price among daily smokers in the U.S. The study goal was to assess significance of cigarette purchase price as a mediator in the association between race/ethnicity (non-Hispanic Black/African American, non-Hispanic White) and nicotine dependence measured in terms of the average number of cigarettes smoked per day. The single-mediator model incorporated 18 covariates as control factors. The results indicated a significant mediated effect of cigarette purchase price on the association. However, the relative effect size of 5% indicated low practical significance of the cigarette purchase price as a mediator in the association between race/ethnicity and nicotine dependence. The approach can be modified to studies where data are gathered via other types of complex sampling.

Patterns and correlates of purchasing cigarettes on Indian reservations among daily smokers in the United States

INTRODUCTION

We described the population of daily smokers purchasing cigarettes on Indian reservations (IRs), estimated the rates of cigarette purchasing on IRs for diverse populations of daily smokers in the U.S., and assessed the trends in the period from 2010-11 to 2014-15.

METHODS

We used the 2010-11 and 2014-15 Tobacco Use Supplement to the Current Population Survey data for adult daily smokers as well as additional information, e.g., state excise tax on tobacco (n = 33,871).

RESULTS

Daily smokers who purchased cigarettes on IRs were primarily 45+ years old, non-Hispanic (NH) White, resided in a state with an IR, paid less than $4.50 per pack, and purchased cigarettes in the state of their residency. The majority of purchases on IRs were made in New York (28%), Oklahoma (14%), Washington (10%), Arizona (9%), and Florida (6%). The rate of purchasing cigarettes on IRs decreased from 4% in 2010-11 to 3% in 2014-15 (p = 0.012). The rates were higher for females than males (OR = 1.23, CI = 1.09:1.40) and heavy than non-heavy smokers (OR = 1.35, CI = 1.17:1.55). Higher state excise tax on tobacco, on average, was associated with purchasing cigarettes on IRs.

CONCLUSIONS

The rate of purchasing cigarettes on IRs is relatively low and has decreased in recent years. However, the rates differ across sociodemographic factors of daily smokers, including the state of residency and purchase. Purchasing cigarettes on IRs at lower prices can affect smokers' intentions to quit and can reduce federal and state efforts toward a tobacco-free nation.