The Tax Incidence and Tax Pass-Through of Smokeless Tobacco in the US

If harm is considered a criterion for taxing tobacco products, the tax incidence on SLT could be further increased. Considering that lower-priced SLT have lower tax pass-through rates, price promotion restrictions and minimum pricing laws may be needed to increase the cost of lower-priced products. Additionally, we observed that tobacco companies tended to increase tax pass-through for premium SLT products as e-cigarettes gained popularity, which may indicate a strategic response to shifting consumer preferences.