Section E

The Impact of Including the Health Impact Fee (2008)

This study defined taxes to include the $225 million in revenue from the Health Impact
Fee (HIF) on cigarettes and other tobacco products. For informational purposes, the
incidence of the HIF is shown in Table 4-12 and Figure 4-6. If the HIF were excluded,
the Suits index would rise from -0.060 to -0.055.
Table 4-12
Incidence of the Health Impact Fee by Population Decile
(Minnesota Residents, 2008)
Burden as Percent of Income
Population Including Incidence If HIF Were
Decile
HIF
of HIF
Excluded
First
32.5%
1.6%
30.9%
Second
13.3%
0.6%
12.6%
Third
11.7%
0.4%
11.3%
Fourth
11.8%
0.3%
11.5%
Fifth
12.1%
0.2%
11.9%
Sixth
12.3%
0.2%
12.1%
Seventh
12.1%
0.1%
12.0%
Eight
12.2%
0.1%
12.1%
Ninth
11.7%
0.1%
11.7%
Tenth
10.3%
0.0%
10.3%
Total
11.5%
0.1%
11.4%
Top 5%
10.0%
0.0%
10.0%
Top 1%
9.7%
0.0%
9.7%
Full-Sample
Suits

-0.060

-0.582

Full-Sample
Suits

-0.055

Burden as Percent of Income

Including Incidence If HIF Were
HIF
of HIF
Excluded
13.8%
0.5%
13.3%
12.1%
0.2%
11.9%
12.2%
0.1%
12.0%
12.2%
0.1%
12.1%
11.9%
0.1%
11.9%
11.6%
0.1%
11.6%
11.0%
0.0%
11.0%
10.4%
0.0%
10.4%
9.8%
0.0%
9.8%
9.7%
0.0%
9.7%
11.5%
0.1%
11.4%
9.7%
0.0%
9.7%
8.5%
0.0%
8.5%
-0.060

-0.582

-0.055

Figure 4-6
Burden as a Percent of Income
All Taxes vs. If Health Impact Fee Included

35%

All Taxes by Population Decile

30%
Percent of Income

Income
Decile
First
Second
Third
Fourth
Fifth
Sixth
Seventh
Eight
Ninth
Tenth
Total
Top 5%
Top 1%

If HIF Were Excluded, by Population Decile

25%

All Taxes by Income Decile

20%

If HIF Were Excluded, by Income Decile

15%
10%
5%
0%
1

4
5
6
7
Deciles (Population or Income)
60

10

back

2008 Incidence Estimate for

Cigarette and Tobacco Excise Taxes1
Tax Collection Amounts 2008
($ Millions)
As Imposed

After shifting

Total

MN HH's

NR

Business

Minnesota*

Exported

$426

$404

$22

$0

$404

$22

* Shifting allocations: Direct = 100%, Consumers = 0%, Labor = 0%, Capital = 0%

Effective Tax Rates, Population Decile

30%

All Taxes

All Taxes Total ETR

25%

Cigarette and
Tobacco

Cigarette and Tobacco

Total ETR
=

3.5%
3.0%

= 11.48%

2.5%

0.23%

20%

2.0%

15%

1.5%

10%

1.0%

5%

0.5%

0%

0.0%
1

Cigarette and Tobacco

All Taxes

35%

10

Deciles

De cile s

All Taxe s

10

32.52% 13.28% 11.71% 11.82% 12.09% 12.27% 12.12% 12.16% 11.77% 10.31%

Cigate tte
3.15%
and Tobacco

1.26%

0.82%

0.59%

0.45%

0.34%

0.26%

0.20%

0.15%

0.04%

91%95%

96%99%

Top
1%

Pop.
Suits
Inde x

11.14% 10.32% 9.69% -0.054

0.09%

0.05% 0.01% -0.564

Includes the Cigarette Tax and Fee ($384.5 million) and the Tobacco Products Tax and Fee ($39.6 million).

115