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Effectiveness of Tobacco Taxation Is Being Undermined

Smokers 'downtrade' to cheaper generics, move to less heavily taxed products, buy multipacks


THURSDAY, Sept. 22, 2016 (HealthDay News) -- The effectiveness of tobacco taxation is being undermined by smokers' behavioral changes and tobacco industry promotions, according to a health policy brief published online Sept. 19 in Health Affairs.

T.R. Goldman, a health journalist, discusses the impact of taxing tobacco products, which has been shown to work on multiple fronts, especially when much of the tax revenue is used to pay for smoking prevention and cessation programs. In the United States, a 10 percent price increase on a pack of cigarettes can result in an overall decline of 2.5 to 5.0 percent in smoking, with an average drop of 4.0 percent, and more pronounced decreases among teens.

Goldman notes that in order to cause a significant decrease in smoking rates, tobacco taxes must occur in sizeable increments, ideally $1 to 2 per pack. States also introduce their own tax on cigarettes, ranging from 17 cents in Missouri to $4.35 in New York State; some counties and cities also add their own taxes. The positive health benefits of tobacco taxes are undermined by "downtrading" to cheaper generics; moving to a less heavily taxed tobacco product; taking advantage of price-reducing promotions offered by tobacco companies; buying cigarettes in larger quantities; and use of black-market cigarettes or traveling to a less heavily taxed jurisdiction.

"States and municipalities remain the most fertile ground for additional cigarette taxes, which as of the summer of 2016 averaged $1.65 a pack," Goldman writes.

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Physician's Briefing