Arguments about taxes are as American as apple pie. But there's one tax that improves health, reduces health care costs and brings in new revenue to balance budgets and fund critical needs. Tobacco taxes, the evidence shows, literally save lives.
There are now 3 million fewer smokers in the United States, thanks in large part to the 62-cent federal tobacco tax increase enacted in 2009 to help fund children's health insurance ("Big tax increase reduces smoking," USA Today, Sept. 11).
Cigarette sales dropped by more than 11 percent in the 12 months after the cigarette tax increase, the second-biggest decline ever recorded.
Teen smoking immediately fell 10 percent to 13 percent when the tax hike took effect, according to researchers at the University of Illinois at Chicago.
More than $10 billion in additional tobacco tax revenue was raised in the first year.
I feel profoundly good about this. I carry the burden of the tobacco industry in my blood. My grandfather was R.J. Reynolds, the founder of the company that bears his name. Smoking killed my father, my brother and other members of my family. I have been a long-time advocate of increasing tobacco taxes because the evidence shows this is one of the most effective ways to reduce smoking and spare many families the tragic consequences.
Tobacco taxes have even greater impact when implemented as part of a comprehensive and sustained strategy to reduce tobacco use. They should be complemented with other proven measures, including strong smoke-free laws, anti-smoking media campaigns, help for smokers who want to quit and restrictions on tobacco marketing.
To continue making progress against tobacco, the United States needs such a comprehensive approach, aggressively implemented by government at all levels.
That is the approach taken by the Obama Administration to reinvigorate the fight against tobacco, starting with the 2009 tobacco tax. The U.S. Food and Drug Administration got regulatory authority over tobacco, health care reform expanded insurance coverage for tobacco cessation, and an unprecedented ad campaign raised awareness of the health risks of tobacco and guided people interested in quitting to a toll-free help line.
Unfortunately, many states have gone in the wrong direction recently. Progress has slowed in enacting tobacco taxes and smoke-free laws, and states have cut funding for prevention and cessation programs by 36 percent. The states get more than $25 billion a year from the tobacco settlement and tobacco taxes, but spend less than 2 percent of it to fight tobacco use. The states must do better.
States that have done the right thing, such as New York, have cut smoking far faster than the nation as a whole. From 2003 to 2011, New York reduced high school smoking by 38 percent, from 20.2 percent to 12.5 percent. In contrast, the national high school smoking rate declined by 17 percent, from 21.9 percent to 18.1 percent. New York similarly reduced adult smoking by more than twice the national decline.
And the evidence shows these efforts not only reduce smoking and save lives, but also save money. A 2011 study found that in the first 10 years of its tobacco prevention and cessation program, the state of Washington saved $5 in tobacco-related hospitalization costs for every $1 spent on the program. A 2008 study put the return on investment from California's program at nearly 50 to 1. States that shortchange prevention and cessation programs are missing out on a remarkable return on investment.
Obviously, tobacco executives don't want tobacco tax increases, because they know they work. One argument they make is that tobacco taxes are regressive — that the burden unfairly falls on low-income smokers. That's chutzpah. The cigarette companies, having targeted low-income Americans and addicted them to tobacco, now argue that a tax increase on their cigarettes is unfair to the poor.
What's truly regressive is smoking itself. Lower-income communities suffer disproportionately from smoking and tobacco illnesses. If public policies can help poorer Americans to quit, those regressive harms and costs are reduced. The Campaign for Tobacco-Free Kids says the savings for a pack-a-day smoker who quits is profoundly significant, with savings ranging from $1,000 to $2,300 annually, depending on the state.
After seeing the powerful result of the federal tobacco tax increase, elected officials should support higher tobacco taxes. It's not about economics — it's about public health. But the economics are pretty excellent, too.
Patrick Reynolds is a grandson of tobacco company founder R.J. Reynolds and executive director of Tobaccofree.org in Los Angeles.