It's Time to Raise the Taxes on Cigarettes -- A Lot

BOSTON (TheStreet) -- I come from a family of chain smokers, so much so that the day after my two-and-a-half-packs-a-day grandmother was diagnosed with terminal lung cancer, she insisted on having one last pack before they hooked her up to the oxygen tank.

My parents and grandparents started smoking before they had even hit their teens. In the days of my grandmother's youth during the 1940s and 1950s, the severe and far-reaching health impacts of smoking were unknown. Smoking was not only accepted, but embraced by American society and celebrated as a sign of sophistication. You could turn on the television and find your favorite television stars smoking in character, and the pages of popular magazines were filled with illustrated ads of doctors claiming cigarettes were good for your health. This might explain why a whopping 42% of American adults were smokers in 1965, as indicated by Centers for Disease Control statistics

Fast forward to 2014: The number of smokers in the U.S. has dropped by more than half to just under 20%, or approximately one out of five people.

This month marked the 50th anniversary of the surgeon general's report and warning on smoking, which ushered in a new era of tobacco control policies and health campaigns. The same week as that anniversary, tobacco companies reached an agreement with the U.S. Department of Justice concerning a new advertising campaign that would include "corrective statements" about the industry's history of defrauding the public by concealing the dangers of smoking. The forthcoming campaign is a result of a court-ordered mandate from 2006 by U.S. District Court Judge Gladys Kessler, who found tobacco companies guilty of violating civil racketeering laws.
Also see: Free Medical Clinics Might Save Millions>> Though a study this month in the Journal of the American Medical Association has concluded that the release of the surgeon general's report has saved an additional 8 million lives over the past five decades, some 440,000 people still die every year in the U.S. due to smoking-related causes. Smoking is still the leading cause of preventable death in our country and the world. So what can be done to further clamp down on the number of smokers and smoking-related fatalities? A recent report in the New England Journal of Medicine finds that tripling taxes on cigarettes around the world would reduce the number of smokers by one-third and prevent 200 million premature deaths. Such a tax would double the street price of cigarettes in some countries, as well as help close the price gap between cheaper cigarettes and their more expensive counterparts, thereby not allowing consumers the option to simply switch to a cheaper brand to continue smoking. "A higher tax on tobacco is the single most effective intervention to lower smoking rates and to deter future smokers," Dr. Prabhat Jha said in a press release. Jha is director of the Centre for Global Health Research of St. Michael's Hospital, a professor in the Dalla Lana School of Public Health at the University of Toronto and co-author of the report.

According to the report, doubling cigarette prices would prevent about 70,000 deaths annually in the U.S. and Canada alone and provide $100 billion a year in revenue for those countries to spend on health care.
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Jha believes such a tax would be especially effective in low- and middle-income countries, which have relatively cheap cigarettes and where smoking is on the rise, but wealthier nations around the globe also stand to benefit from such policies. For instance, cigarette consumption in France dropped by half between 1990 and 2005 when taxes were raised well above inflation. Smoking rates also plummeted in South Africa -- particularly among the young and poor -- after taxes were increased.

Even in the U.S., the number of smokers has dropped in tandem with higher cigarette prices. In New York City, where cigarettes are more expensive than the national average, only 14% of people are smokers.

"Worldwide, around a half-billion children and adults under the age of 35 are already -- or soon will be -- smokers and on current patterns few will quit," professor Sir Richard Peto of the University of Oxford and co-author of the study said in a press release. "[Our] study demonstrates that tobacco taxes are a hugely powerful lever and potentially a triple win -- reducing the numbers of people who smoke and who die from their addiction, reducing premature deaths from smoking and yet, at the same time, increasing government income." The study builds on earlier research by Jha and Peto that found people who quit smoking when they are young can regain almost the full decade of life expectancy they would have otherwise lost by continuing to smoke. This has serious implications for the U.S., where adults between the ages of 20 and 30 represent some of the highest smoking rates in the country. "All governments can take action by regularly raising tobacco taxes above inflation, and using occasional steep tax hikes starting with their next budget," Peto said. "Young adult smokers will lose about a decade of life if they continue to smoke -- they've so much to gain by stopping."