The Korea Herald

피터빈트

Tobacco taxes work, but only if they’re high

By 김케빈도현

Published : Oct. 25, 2016 - 14:38

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When smoking costs more, more people quit. That’s why higher cigarette taxes are almost always good policy, for smokers and the public health, too.

There’s a catch, though -- and it’s one that voters in four states should keep in mind as they consider ballot initiatives next month to raise cigarette taxes: Sin taxes work only if they’re high enough.

Voters in California, Colorado and North Dakota are being asked to raise state taxes to well over $2 a pack. Then there’s Missouri, where voters will choose from two increases so meager that they make a mockery of the very idea of sin taxes.

Properly calibrated, tobacco excise taxes can be a powerful weapon against smoking and the disease and death it brings. Raising taxes enough to boost the price per pack by 10 percent lowers adult consumption by 3 to 5 percent. Among teenagers, consumption falls 6 to 7 percent.

This effect is especially pronounced among lower-income smokers -- the upside of imposing such a regressive tax. And it’s made even stronger if some of the tax money is invested in public health efforts to help people quit, as the California initiative (which is supported by Michael R. Bloomberg) would do.

The World Health Organization says taxes should amount to 70 percent of the price of a pack of cigarettes. No taxes in the US are that high, though in some cities they come close. In Chicago, the various taxes on each pack -- federal, state, county and city -- amount to about 60 percent of the $12 price, and public health officials say this has helped lower the smoking rate.

If California’s ballot measure passes, the state tax per pack will rise to $2.87, from 87 cents. In Colorado it will go to $2.59, up from 84 cents, and in North Dakota, to $2.20 from 44 cents. There are a couple of drawbacks: Revenue from the North Dakota tax would not be used to fund any efforts to help people quit smoking. In Colorado, electronic cigarettes would be exempt. But in all three states the increases are big enough to be worthwhile.

(Bloomberg)