President Obama today has taken bold action to protect our children from tobacco addiction and save lives by proposing to increase the federal cigarette tax by 94 cents per pack and similarly increase taxes on other tobacco products. We urge Congress to support this proposal, which would have as great an impact in reducing tobacco use among kids as any action the federal government has taken. It would be a giant step toward winning the fight against tobacco, the nation's number one cause of preventable death.
On top of the health benefits, the proposed tobacco tax increases would raise $78.1 billion over 10 years to fund early childhood education initiatives proposed by the President, according to the Office of Management and Budget.
Study after study has shown that increasing the tobacco tax is one of the most effective ways to reduce smoking and other tobacco use, especially among kids. Even tobacco companies admit in their own documents that tobacco tax increases reduce youth smoking, which is why they vehemently oppose them. Economic research has found that every 10 percent increase in the price of cigarettes reduces youth smoking by six or seven percent and overall cigarette consumption by three to five percent.
The health and economic benefits of a federal tobacco tax increase were confirmed in a 2012 report by the highly respected Congressional Budget Office. The CBO found that a 50-cent increase in the federal tobacco tax would raise substantial new revenue while prompting nearly 1.4 million adult smokers to quit by 2021, saving tens of thousands of lives and reducing health care costs, including for the Medicaid program. Based on the CBO's statement that a $1 tax increase would roughly double those benefits, we estimate that a 94-cent cigarette tax increase would prompt 2.6 million adult smokers to quit and save 18,000 lives by 2021.
In addition to these gains from helping current smokers quit, the Campaign for Tobacco-Free Kids estimates that a 94-cent increase in the federal cigarette tax would:
Prevent 1.7 million kids from becoming addicted adult smokers
Prevent 626,000 premature deaths from these reductions in youth smoking alone
Save $42 billion in future health care costs from these reductions in youth smoking.
The increased taxes on other tobacco products would have additional health benefits, preventing kids from using harmful and addictive products such as cheap, sweet cigars and smokeless tobacco.
These benefits are also evident from the most recent increase in the federal tobacco tax, a 62-cent per pack increase enacted in 2009. As a result, cigarette sales declined by 8.3 percent in 2009 – the largest drop since 1932. Health economists at the University of Illinois at Chicago found an immediate decline in youth smoking after the 2009 increase – the percentage of students who reported smoking in the past 30 days dropped between 9.7 percent and 13.3 percent (reducing the number of youth smokers by more than 220,000). In the 12 months after the increase (April 2009 to March 2010), federal cigarette tax revenue increased by 129 percent (from $6.8 billion to $15.5 billion), even as cigarette sales declined.
Furthermore, national and state polls consistently show strong public support for substantial increases in tobacco taxes, with most polls showing voters favoring tobacco tax increases by more than a two-to-one margin. Polls consistently have found that large majorities of Democrats, Republicans and Independents and voters from a broad range of demographic and ethnic groups all support tobacco tax increases – as do significant numbers of smokers.
In short, a significant tobacco tax increase is a win-win-win for the country – a health win that will reduce tobacco use and save lives, a financial win that will raise revenue to fund an important initiative and reduce tobacco-related health care costs, and a political win that is popular with voters.
The President's proposal is exactly the shot in the arm needed to accelerate progress in reducing tobacco use, which kills more than 400,000 Americans and costs the nation $96 billion in health care bills each year. While the nation has greatly reduced smoking, 18.1 percent of high school students still smoke and nearly 1,000 kids become new regular smokers each day. Tobacco companies spend $8.5 billion – nearly $1 million each hour – to market their deadly products, often in ways that appeal to kids.
The tobacco tax proposal builds on other important actions the Administration has taken, including FDA regulations to stop tobacco marketing and sales to kids, the government's first-ever national media campaign to prevent and reduce smoking, and expanded insurance coverage and assistance to help smokers quit. Continuation of these initiatives, along with enactment of the proposed tobacco tax increase, can help create a future free of the death and disease caused by tobacco.