Apr. 5 2013
WASHINGTON, DC – It is great news for our nation's health, and especially for the health of our children, that President Obama plans to propose an increase in the federal tobacco tax to pay for early childhood education initiatives. The New York Times reported today that this proposal will be included in the President's budget next week.
A significant tobacco tax increase will prevent kids from smoking, encourage smokers to quit, save lives and save money by reducing tobacco-related health care costs, which total $96 billion a year. It will build on the Administration's unprecedented commitment to fighting tobacco use, which is the nation's number one cause of preventable death and kills more than 400,000 Americans every year.
The evidence is clear that increasing the tobacco tax is one of the most effective ways to reduce smoking and other tobacco use, especially among kids. 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. In 2009, when the federal cigarette tax went up by 62 cents per pack, cigarette sales declined by 8.3 percent – 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). Tobacco companies admit in their own documents that tobacco tax increases are highly effective at reducing youth smoking.
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. One in three will die prematurely as a result. A significant increase in the tobacco tax would accelerate progress in defeating what a 2012 Surgeon General's report called a "pediatric epidemic" of youth tobacco use. It would build 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.
Even while reducing smoking, higher tobacco taxes are also a reliable source of revenue to fund programs such as the early childhood education initiative. Every time the federal government and the states have substantially increased tobacco tax rates, they have enjoyed substantial increases in revenue. In the 12 months after the 2009 federal tobacco tax 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. A 2012 report by the Congressional Budget Office found that a significant increase in the federal tobacco tax would raise substantial new revenue, while reducing smoking, saving hundreds of thousands of lives and reducing health care costs, including for the Medicaid program.
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. We look forward to learning more about the President's proposal and urge Congress to enact a significant increase in the tobacco tax.