I thought it’s good for the population, how can it be regressive in nature?
In Economics, when we say that a certain measure (e.g. tax) is regressive, we mean that it financially impacts the lower income segments of the population more than the higher income segments.
The opposite of a regressive measure, is a progressive one.
Generally, an excise tax, which is an indirect tax on the sale of specific goods and services, like cigarettes, is considered to be regressive.
This is because in the absence of price discrimination (i.e. the same good or service is sold at different prices by the same supplier), the same tax burden would be levied on consumers, regardless of their income.
Therefore relatively speaking, the lower income population segments will feel the tax burden more as the proportion of the tax against their income will be higher than those of higher income.
Also, something additional to point out (high/low-SES politically incorrect statement alert!): It doesn’t help matters that those from lower socio-economic segments of the population are more likely to smoke.
This further amplies the regressive effect of the cigarette tax.
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