A recent opinion piece by Michael Schaus repeats a tedious and all-too-familiar tobacco industry talking point: that higher cigarette taxes cannot both reduce smoking and increase state revenue. Decades of evidence from the states prove otherwise.

Every state and country that has significantly increased its cigarette tax has generated substantial new revenue — yes, even as smoking rates and cigarette sales have declined. 

That is exactly what public policy should achieve: fewer smokers, lower healthcare costs and more revenue to help offset the enormous financial burden that tobacco use places on taxpayers. In Nevada, for every $1.80 collected in cigarette taxes per pack, more than $40 is lost to health costs and lower productivity.

Like many critics of tobacco taxes, Schaus relies on an industry-funded source to make the tired argument that higher cigarette taxes simply drive smokers across state lines or into the illicit market. But a report by the National Research Council and Institute of Medicine determined that "industry-sponsored estimates of the size of the illicit market tend to be inflated."

The actual tax revenue tells the real story. While some smokers may cross state lines to avoid higher taxes, the state that raises its cigarette tax consistently comes out ahead. Even if a neighboring state gains some revenue from cross-border cigarette sales, those gains are dwarfed by the new revenue collected by the state that increased its tax.

If you believed the extreme picture painted by critics, you would think states that aggressively tax cigarettes are shortsighted in attempting to legislate public health. Take New York, the frequent bugaboo of the "all taxes are bad" crowd. The distortions largely vanish when you look at the complete picture. According to updated data from the annual compendium, The Tax Burden on Tobacco, after New York raised its cigarette tax by $1 per pack in 2023 — bringing it to $5.35, the highest state cigarette tax in the nation — pack sales fell by 14 percent. However, crucially, the state still collected more than $42 million in additional cigarette tax revenue in the following 12 months. Meanwhile, every neighboring state saw its cigarette tax revenue decline, suggesting little or no cross-border shopping.

It was a similar story in Indiana. In the first six months after a $2 per pack increase in July 2025, cigarette sales fell by about 14 percent and tobacco tax revenues grew by $170 million. Empirical research found no evidence of widespread cross-border shopping.

Then there's the argument that says states should tax "less harmful" tobacco products at lower rates to encourage smokers to switch. But no emerging product, including nicotine pouches, has been approved by the Food and Drug Administration as a smoking cessation aid. Instead, these products have helped maintain nicotine addiction among more than 2 million young people. Keeping taxes low on these products makes them more affordable and accessible, especially to kids. When Indiana raised its cigarette tax, it also increased taxes on other tobacco products such as e-cigarettes, and the early evidence shows declines in consumption here, too. Indiana is winning in all areas: fewer kids using tobacco products, more adults quitting and more tax revenues for a balanced state budget.

In terms of such taxes, Nevada currently sits in the middle of the pack. Unfortunately, the state's cigarette tax has not increased in more than 10 years. Because of inflation, $1.80 in 2026 is worth considerably less than $1.80 was when the tax was last raised in 2015 . So the positive effects the tax initially had on deterring kids from starting to smoke or encouraging smokers to cut down or quit have largely disappeared. 

Notably, tobacco companies in recent years have raised cigarette prices because they figured out that they can make more money even if they're selling fewer cigarettes overall. In essence, they're using the logic of public health advocates. 

But if Nevada raised its cigarette tax, not only would public health improve but its citizens would benefit from this additional tax revenue. At the current tax rate, Nevadans are essentially subsidizing tobacco companies' profits by paying most of the enormous health, economic and social costs of their highly addictive products. 

The quaint notion that smoking is a personal choice is completely undermined by at least two key dynamics: One, most smokers start as kids when they are most vulnerable to tobacco companies' marketing and the physiological effects of nicotine; and two, society — mostly nonsmokers — heavily subsidizes the minority who smoke. For almost everyone in this equation, there's not much "choice."

Can tobacco taxes go too far and backfire? I hear this all the time: If we were to tax cigarettes out of existence, it would destroy an important revenue stream for governments — so we should tolerate this addictive, unhealthy and economically devastating product at some level for the sake of continued public revenue. 

This is absolutely the wrong way to think about it. In the dozens of states and countries where our research team at Johns Hopkins University works on this issue, governments are losing many times the amount of tobacco taxes they generate in healthcare costs and lost economic productivity (more than 20 times in Nevada!). 

Imagine if Nevadans weren't paying those costs and a much healthier, mostly smoke-free population were more productive. This new economic activity would further invigorate the state economy and create many new revenue streams for the government far beyond the paltry amount the state is getting from cigarettes. So, the economic benefits would accrue even if tobacco tax revenues dwindled — a prospect that, incidentally, is a long way off.

But my core personal and professional concern is public health, so let's not forget the most important fact: Decades of independent research have found that raising tobacco taxes is one of the most effective ways to reduce tobacco use. Higher prices encourage adults to quit, discourage young people from starting and save lives.

The tobacco industry has opposed significant tax increases for decades precisely because these taxes work. The evidence is clear. Tobacco taxes not only reduce smoking but also generate new tax revenues and lower healthcare costs. That's why Nevada should significantly increase its tobacco tax.

Jeffrey Drope is research professor at the Johns Hopkins Bloomberg School of Public Health and director of Economics for Health. He focuses on the nexus of major public health challenges such as alcohol and tobacco control, nutrition and physical activity as well as economic policies.