Why It’s Time for States to Raise Their Tobacco Taxes

It would address the leading cause of preventable death in the U.S. while boosting revenue to address the public health and economic crisis caused by the pandemic.

States struggling under the weight of the public health and economic crisis caused by the coronavirus pandemic have a simple, bipartisan option: raising tobacco taxes. Substantial increases in taxes on cigarettes and other tobacco products, including electronic cigarettes, have the benefit of improving public health across populations, increasing revenues for community programs and lowering future health-care costs for governments and businesses.

In the face of the pandemic, states across the geographic and political spectrum — including Georgia, Hawaii, Indiana, Kansas, Minnesota, New Mexico and New York — are actively considering tobacco tax increases during their legislative sessions. Last month, a bipartisan supermajority in the Maryland Legislature moved to increase the state's cigarette tax by $1.75 per pack, the first increase in nearly a decade, and to establish a tax on e-cigarettes to fund tobacco cessation and health programs.

The growing legislative momentum comes after voters in Colorado and Oregon approved tobacco tax increases in ballot measures last November. Colorado, which had not raised tobacco taxes in 16 years, will collect an estimated $175 million in revenue during the 2021-22 budget year for tobacco cessation and health programs. In Oregon, higher tobacco taxes will generate an estimated $160 million per year and help to fund the care of people with mental illnesses and other conditions.

The health threats of tobacco use are clear. Tobacco products are a leading cause of heart disease and stroke, and they are responsible for one of every four deaths from cardiovascular disease. Overall, tobacco use remains the leading cause of preventable death in the United States, killing more than 480,000 people in America each year and accounting for more than $300 billion annually in direct medical expenses and workplace productivity losses. On top of that, smoking and vaping increase the risk of severe illness from COVID-19.

Tobacco companies spend billions of dollars each year on marketing campaigns designed to addict consumers to products that shorten life when used as intended. The companies target youth on social media platforms with fruit- and candy-flavored products and with advertising that associates tobacco use with being young and cool. They also aim special discounts at Black, Hispanic/Latino, American Indian and Alaska Native communities. They concentrate their sales in low-income neighborhoods, which have a higher density of tobacco retailers and where discount coupons and point-of-sale discounts are more common.

Raising tobacco taxes has clear benefits that help to counter the tobacco industry's life-threatening tactics. The U.S. surgeon general concluded that increasing cigarette prices through excise taxes leads to reductions in smoking for both youth and adults. The key is to increase the price of tobacco products enough to overcome the discounts tobacco companies utilize in communities of color and low-income areas to neutralize the impact of small tax increases. States with more substantial tax increases tend to experience larger declines in tobacco use.

Tobacco taxes work. Every state that has significantly increased its cigarette tax rate has raised substantial additional revenue while saving in future health-care costs from the corresponding decline in tobacco consumption. And contrary to the misleading suggestions of the tobacco companies, tobacco taxes have little to no effect on consumer spending. In fact, tobacco tax increases lead consumers who would have purchased tobacco products to spend their money on other in-store items.

No matter what perspective you approach this issue from, we all should share a steadfast commitment to preventing death and suffering from tobacco use. We urge governors and legislators to work together to enact substantial tobacco tax increases that will save lives, improve health and raise vital revenue.

Governing's opinion columns reflect the views of their authors and not necessarily those of Governing's editors or management.

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