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Money Talks: Increased Tobacco Taxes Reduce Smoking

I’ve heard some opponents of Initiated Measure 25, the tobacco tax for vo-techs, say that raising the tobacco tax won’t make anyone quit smoking. But if that were true, why would Philip Morris spend $6 million to stop us from raising our tobacco tax?

The relationship between tobacco taxes and tobacco use is pretty well documented: raise taxes on smokes, and smoking rates decline:

…the experts agreed that there was sufficient evidence of effectiveness of increased tobacco excise taxes and prices in reducing overall tobacco consumption and prevalence of tobacco use and improvement of public health, including by preventing initiation and uptake among young people, promoting cessation among current users and lowering consumption among those who continue to use [Chaloupka, Straif, and Leon, “Effectiveness of Tax and Price Policies in Tobacco Control,” Tobacco Control, May 2011].

and

Health experts agree that raising taxes is the most effective way to reduce tobacco use. The U.S. surgeon general, the World Health Organization and the Centers for Disease Control and Prevention have all concluded that raising taxes helps large numbers of smokers to quit and have loudly advocated doing so.

But many states — Missouri, Kentucky and Georgia among them — have not significantly increased their cigarette fees in decades, bowing to pressure from tobacco lobbyists and an ingrained antipathy among conservatives to raising taxes of any kind [William Wan, “Cigarette Taxes Are the Best Way to Cut Smoking, Scaring Big Tobacco,” Washington Post, 2017.10.21].

We might argue that IM 25 might not reduce smoking as much as other tobacco tax hikes because the new revenue is not being dedicated to smoking-cessation education. But the tobacco companies agree that, regardless of how we spend the money, higher tobacco taxes are the biggest threat to keeping their customers addicted:

Internal documents disclosed in lawsuits show how seriously tobacco companies perceive the threat of cigarette taxes, with several tobacco companies calling tax hikes the most alarming, existential threat they face. Over the years, those companies have invested heavily in conservative and libertarian political groups.

Because tobacco lobbyists hold sway over state lawmakers, health officials have tried in many states to bypass them, using ballot initiatives that put the decision in the hands of voters. But tobacco companies have managed to block those efforts, as well. Last year, three out of four tax increases were defeated at the polls, with tobacco companies outspending health groups at enormous ratios [Wan, 2017.10.21].

I have my own policy issues with IM 25, but both sides on this issue agree that adding a dollar per pack to the cost of cigarettes will lower rates of smoking.

39 Comments

  1. jerry 2018-11-05 08:26

    Nailed it Cory! Every tobacco shop and those that sell those cancer sticks have the signage up. Smokers (I was one for years) have to decide like I did, that the cost of the addiction is just too damn high. 6 bucks a pack for cigarettes to fund your addiction. Does add up very quickly. Smoking should be a rich man’s game, let the elites smoke’m if they got’m. What surprised me is that it took so long for opponents of tobacco to see the real deal and call out big tobacco. I guess when you hide in the plain sight of the smoke and mirrors, you get by.

  2. Porter Lansing 2018-11-05 08:39

    Agreed, Jerry. I was at three packs a day. Smoked continually from age 12 ’til age 52. Not one puff in 13 years, now. I tried to quit many, many times but being a fiscal conservative at my core, it was the cost that tipped the scale. Also, CO has a helpline that’s well advertised on tv during sporting events. Colorado Quitline supplied me with cessation products (free) that were paid for by cigarette taxes. Does SD have such a program? Or does the word program fall into the same misinformation campaign with liberal and Democrat?

  3. o 2018-11-05 09:04

    The IM 25 ads featuring Speaker Mickelson have really rubbed me the wrong way. He narrates about the high costs of getting a technical education in SD as if it were a force of nature, something that HIS legislature did not create (or at minimum choose not to relieve).

    Letting IM 25 slip into public health discussion trivializes it as revenue, education, and public health policy. It is revenue policy that falls into the two traps of GOP tax increases: it uses “education” as the shield (as video lottery did) and gets “the other guy” to pay the tax (as video lottery did). If we were serious about eliminating the health effects fo smoking, we would ban the only product sold in America that kills the user when used as directed.

  4. Michael L. Wyland 2018-11-05 10:06

    I oppose IM 25 for several reasons.

    It’s a user fee unrelated to its intended use.

    It’s bad public policy because, as both gubernatorial candidates agree, it’s likely to be a short-term boost for technical education rather than a long-term funding solution. Why? Precisely because taxation affects behavior, as IM 25 proponents argue.

    South Dakota is the only state without a public community college system. Our tech schools, until recently, were tied to local K-12 school districts and were funded overwhelmingly by federal funds and tuition (a significant portion of which is also paid with federal funds in the form of Pell grants). State support has been limited to bonding authority for building construction and a few miscellaneous items.

    Establishing the state tech board was a potential funding threat to both the Board of Regents and the K-12 public education funding streams. Tying IM 25 to tobacco sales rather than the general fund was an attempt to bypass education interest competition for general fund revenues. Despite this, the SD Education Assn. opposes IM 25. BTW, I would not assume that SDEA is in favor of tobacco based on their position on IM 25.

    I’m a non-smoker and would prefer than others would quit, for both health and economic reasons. IM 25 started out as a way to fund postsecondary technical education but has been muddied due to the specifics of the funding mechanism and its lack of relationship to the stated goal. If IM 25 were a tech ed support measure, or if it were a tobacco tax measure, I’d be much more likely to support it. Unfortunately, it’s both and neither. I agree with Billie Sutton and Kristi Noem – I oppose IM 25.

  5. Rorschach 2018-11-05 10:11

    I agree with Michael Wyland. Taxing tobacco to fund tech ed is a mismatch. I do think we should let counties tax alcohol to fund criminal justice – which isn’t a mismatch.

  6. jerry 2018-11-05 13:23

    Mr. Rorschach, Tobacco and alcohol walk hand in hand. “The short-term effects of mixing alcohol and tobacco are subtle. If you have ever visited a bar, you know that it is a common practice to drink and smoke at the same time. The primary danger from drinking and smoking simultaneously is that, because one drug is a depressant and the other one is a stimulant, you may not realize how much the alcohol is affecting your body. This could cause you to drink more than you should because you do not feel drunk. Incorrectly assessing your level of inebriation could lead to poor judgment.” https://www.alcohol.org/mixing-with/tobacco/

    The rest of the article articulates the dangers of the combinations of them both and why they should be taxed more as we taxpayers are paying for their health issues.

  7. TAG 2018-11-05 14:00

    I don’t like the fact that Big Tobacco is getting involved in the debate, but I still don’t like squeezing more money from sin taxes. Sin taxes and sales taxes are both regressive, meaning they dis-proportionally harm lower-income South Dakotans. We are already top-6 in the proportion of our state budget that comes from sin taxes. (mostly gambling)

    The problem here is that we are so income-tax averse that any new funding needed has to come from creative places. You can only go to that well so many times. I think the question that should be asked is: is this the only way to support tech education, or can we start to offer Tech programs at our many existing state schools?

    Also: I’ve read that property taxes tend to hit farmers harder than other forms of taxation. Why can’t we look at ways of lowering property tax at the same time that we offset it with a small income tax? It wouldn’t have to be progressive, either. Just do a flat tax. Won’t happen, of course.

  8. o 2018-11-05 14:40

    TAG, agreed. Politics makes strange bed fellows, or the enemy of my enemy is my friend.

  9. Darin Larson 2018-11-05 16:04

    Two rights don’t make a wrong: It makes sense to tax cigarettes to lessen the number of people who are lured into destroying their health and costing our healthcare system (that’s you and I) billions in this country. It also makes sense that we need to make technical education more affordable in SD.

    The fact that we could have other more stable and fairer taxation methods that support technical education in SD is true. However, we can wish on the one hand for a perfect world that won’t happen anytime soon or, on the other hand, we can make the best decision between two imperfect choices and support IM25.

    The fact that Big Tobacco and their $6 million in outside funding is bankrolling the opposition to IM25 should tell people where they should be standing on this issue.

  10. Debbo 2018-11-05 16:11

    I’d like to see a tobacco tax go to smoking cessation. Didn’t the SDGOP do something else with the Big Tobacco settlement $?

    A fair tax to fund education without relying on “sins” or overly burdening farmers would be a progressive income tax. Much fairer than a flat tax or sales tax. But that’s why SDGOP doesn’t like it. A progressive income tax would require all South Dakotans to pay their fair share. SDGOP would much rather smokers, drinkers and farmers pay the biggest share.

  11. Darin Larson 2018-11-05 16:17

    Debbo, I agree that we should be doing more in terms of smoking cessation efforts in this state.

  12. Michael L. Wyland 2018-11-05 16:17

    Debbo:

    Most states received tobacco settlement monies. Some established trust funds, using investment proceeds for smoking cessation and other healthcare priorities. Others devoted investment proceeds to their general funds, justifying it by saying that general funds had been used for healthcare expenses for smokers for decades. Still other states used the money on a one-time basis for various programs and services.

    Here’s what the Campaign for Tobacco-Free Kids says about South Dakota’s use of tobacco settlement funds: https://www.tobaccofreekids.org/what-we-do/us/statereport/south-dakota

  13. Michael L. Wyland 2018-11-05 16:35

    Darin:

    Perhaps you’re more informed than I am about the issue, but before I’d advocate for more spending, I’d like to know what is being done now and what the experts in state government and elsewhere might do with funding in addition to what they’re already receiving.

    I remember receiving a briefing from a state health dept. official about SD’s Ryan White allocation. The official’s concern was that we had so few reported cases of AIDS and HIV that the state was having difficulty allocating the funds the feds were sending. The official asked *me* to be on the lookout for additional potential beneficiaries that they (the state health dept.) hadn’t already identified.

    I see a lot of public service announcements for smoking cessation paid for by the state, and I know they operate phone lines for information, referral, and even counseling. They have also provided free access to medications that assist with nicotine withdrawal. I’m not opposed to additional funding, but I want to know what is not being done that could be done with more state money.

  14. bearcreekbat 2018-11-05 17:21

    This issue has my mind in a complete tailspin. I think choosing to smoke is self destructive, but I recognize that smoking gives people some pleasure (even if it is in part the pleasure from deadening withdrawal pangs). And I ask myself whether I think our government should penalize folks who decide the pleasures outweigh the cost. I certainly oppose criminalization of tobacco, marijuana, alcohol, and other substances that people might enjoy partaking in. And it seems that justifying placing a tax on cigarettes to discourage smoking is a form of criminalization, although not particularly extreme – sort of like a continuing fine. This gives me pause.

    I strongly oppose regressive taxation, such as sales tax on items everyone needs to survive like food, clothing, gas, and the typical necessities of life. Taxing cigarettes, however, does not seem particularly regressive as we all have a free choice whether to imbibe or not. While it is extremely difficult to quit smoking (I was a 25 year, 4 pack a day smoker when I finally quit for good and I went through more misery than I could imagine), anyone can quit, as evidenced by the many folks who have succeeded in quitting. Hence, paying any cigarette tax seems more a voluntary choice than a compulsary regressive tax. Regardless of our income, we can choose to pay the tax and buy cigarettes, or decline to pay the tax by not buying cigarettes. This free choice undermines my concern for low income smokers being taxed in a regressive manner.

    It seems a great idea to impose taxes to enhance funding for our technical schools, yet there is no rational reason for me to support taxing only cigarette smokers given my objection to a government policy to punish people for smoking. And while tax is not at all a punishment if people are taxed in a uniformly progressive manner, so-called sin taxes are certainly a form of punishment aimed at a select few regardless of ability to pay, rather than those most able to pay.

    Finally, I also have a visceral negative reaction to “big tobacco” funding the opposition and at first I would have agreed with Debbo that reaction was sufficient to support the new tax. But then it occurred to me that it seems irrational to support the right to buy cigarettes and smoke while opposing the ability of cigarette makers and/or venders to sell cigarettes.

    My personal confusion normally would not justify a blog comment but I am still in a quandry as I have not voted yet. Since the measure could be decided by one vote – mine (against all odds) – I feel obliged to share my doubts and seek the counsel of my fellow blog commenters. I will read any additional comments here and think about your excellent arguments before making my final decision tommorow. What to do? What to do?

  15. Porter Lansing 2018-11-05 17:55

    BCB My extra comment. I see your point. If the playing field was level, what you’re thinking would be perfect. However, Big Tobacco puts addicting agents into their product to keep their users in a slavelike state. Not everyone who uses alcohol becomes an alcoholic but everyone who uses tobacco becomes highly addicted.

  16. grudznick 2018-11-05 18:16

    grudznick agrees with most of you bloggites. Surprise! The IM #25 is taxing some for only others, and you know my stance on “don’t tax just me for only you.” Also, does’t the two purported reasons for the IM #25, to lessen smoking and to pay for tuition, admit that you would eventually kill the goose laying the eggs to fund tuition?

    Besides, don’t tax all my friends who toke on those cigs more, please. Except for Bob, most of them can’t afford it.

  17. mike from iowa 2018-11-05 18:19

    So it sorta comes down to people’s health versus korporate amerika’s profits.

    Are we going to allow people to profit from facillitating other’s addictive bad habits? Do we draw a line somewhere to protect those not mature enough to decide for themselves if they want nicotine in their bodies?

    How would that affect L & M’s bottom line? Maybe tax proceeds should be pooled to defray inevitable lung, mouth and throat cancers.

    Maybe tech school kids could receive government grants for said schools if they never smoke.

    Something has to be done, but, what will it be?

  18. grudznick 2018-11-05 18:37

    I know! Let’s tax teachers specifically to fund votech tuition so more kids go to votechs and the teachers can be paid more which will collect more taxes to pay more scholarships so even more kids fund raises for votech teachers! Plus, everybody quits smoking on their own.

  19. Porter Lansing 2018-11-05 18:59

    I didn’t quit smoking on my own. The taxes smokers (including myself) paid to provide me with the cessation products I used. Also, counseling was available. Literature was available. Support was available.
    Teachers are helping kids, so taxing them would be senseless. Cigarette makers are killing kids (eventually), so taxing them is proper.
    The problem with IM25 isn’t the taxation. The problem is the untrustworthy guy that’s pushing the IM. Another problem is where the tax money goes. VoTechEd is just a ploy to get mo money, mo money, mo money into the SDGOP’s embezzlement range. Their history of corruption should make all vote against IM25, if for no other reason. The deception that the VoTech scheme is necessary at all is because of the SDGOP’s fear of honest government and their failure to embrace the only thing that can ( in the long run) save the people’s money. Good government saves money and yes, it tells people what to do. The good of the group is more important than the selfishness of those able to become powerful enough to corrupt it.

  20. Debbo 2018-11-05 19:35

    3 packs per day smoker here for 20 years. I used nicorette gum to quit, and it was still very difficult.

    I’d vote for it so more people will quit. In the meantime, elect Randy Seiler, Sutton and the other Democrats to clean up the corruption. The SDGOP will never, ever clean themselves up.

  21. grudznick 2018-11-05 19:55

    And one can hardly tell by your leathery countenance, Ms. Geelsdottir. But I’m with you on Mr. Seiler.

    PS: more dems smoke than pubs.

  22. Darin Larson 2018-11-05 20:39

    Mr. Wyland:

    I have contact with folks involved in the anti-smoking efforts and I get the feeling that there is more that could be done with more funding. In fairness, I have not asked this question nor been told this directly by them.

    My personal perception is that there are reasonable anti-smoking efforts being made now, but much more aggressive campaigns and treatment options could be put forth with additional funding. I see anti-smoking public service announcements on TV as you mention, but I think they could seek a much wider audience with an emphasis on preventing teens from starting to smoke. For instance, I can’t remember ever seeing an anti-smoking ad campaign at a sporting event or a concert or in other entertainment venues. Maybe I don’t frequent the venues where efforts are front and center to prevent teens from trying smoking or maybe I’m somewhat oblivious because I have never smoked, but it seems that anti-smoking efforts could be much more pervasive. Given what is at stake (the health and well-being of kids as well as adults for a lifetime and the societal costs of smoking), I think it is almost the proverbial “no-brainer” to increase our efforts with regard to prevention and treatment of smoking.

    Here is what the CDC had to say in January of this year:

    “Despite this progress [in reducing smoking], disparities in smoking persist across population groups. Cigarette smoking was especially high among males, those aged 25-64 years, people who had less education, American Indians/Alaska Natives, Americans of multiple races, those who had serious psychological distress, those who were uninsured or insured through Medicaid, those living below the poverty level, those who had a disability, those who were lesbian, gay, or bisexual, and those who lived in the Midwest or South.

    “The bad news is that cigarette smoking is not declining at the same rate among all population groups,” said Brian King Ph.D., deputy director for research translation in CDC’s Office on Smoking and Health. “Addressing these disparities with evidence-based interventions is critical to continue the progress we’ve made in reducing the overall smoking rate.”

    Reducing smoking-related disease: What more can be done?

    Proven population-based interventions – including tobacco price increases, comprehensive smoke-free laws, anti-tobacco mass media campaigns, and barrier-free access to tobacco cessation counseling and medications – are critical to reduce cigarette smoking and smoking-related disease and death among U.S. adults, particularly among populations with the highest rates of use.

    https://www.cdc.gov/media/releases/2018/p0118-smoking-rates-declining.html

    Your example of the dearth of AIDS/HIV cases in SD and the difficulty in finding suitable places to spend education and prevention funds reminds me of the reactionary nature of people and government. SD and the nation in general have experienced a resurgence in STDs as complacency has set in.

    https://www.argusleader.com/story/news/2018/06/11/stds-south-dakota-losing-fight-against-resurgent-sexually-transmitted-diseases/690050002/

  23. grudznick 2018-11-05 20:51

    Mr. Larson, is this IM #25 about making people stop doing stupid things voluntarily, or about paying the votech kids? You are confusing me. I thought it was about paying for school for votech kids.

  24. Darin Larson 2018-11-05 21:09

    Grudz, IM25 is both about reducing smoking and about funding technical education in my view. You can vote for it for one or both reasons.

  25. grudznick 2018-11-05 21:21

    But Mr. Larson, if you fund votech kids by taxing smoking and then reduce smoking, you are killing your golden goose. You have set up the kids to have the rugs pulled out from their feet. I think this is an ill-thought-out brain beast of that Mr. Mickelson fellow you see on the TV shows.

  26. Porter Lansing 2018-11-05 21:36

    Mr. Larson
    Teens don’t smoke anymore. They vape nicotine from little devices made to be hidden from parents and teachers. True to their villainy, tobacco companies are doing everything they can to use vape pens to get teens hooked on nicotine. Here’s current info, which S.D. needs to use to get ahead of the curve. Being ten years behind on this one will hook another generation on the nicotine death train.
    https://amp.usatoday.com/amp/1336836002

  27. grudznick 2018-11-05 21:48

    Darwinism will solve all our problems.

  28. Darin Larson 2018-11-05 22:40

    Porter,

    I understand vaping is a teen epidemic and is a gateway to smoking, but smoking itself is still a problem for many kids. When 3800 kids try their first cigarette everyday, this is still an obvious societal issue we need to combat.

  29. Jason 2018-11-05 22:47

    3800 kids out of how many Darin?

    I would say a bigger problem is when only 36% of Americans can name the Three branches of Government.

  30. MHR 2018-11-05 22:48

    INCREASE CIG TAX TO $10/pack! – cost is proven most evidence-based reason to quit or not start to smoke – give proceeds for technical edu – ya it’s not the best way to find education but hay it’s a start – vote this measure as a smoking prevention measure – the tobacco folks are Sleazeballs personified and should all go to hell for damaging our kids!

  31. Cory Allen Heidelberger Post author | 2018-11-05 22:49

    TAG, I’ll throw my marker down: if South Dakota does consider an income tax, it has to be progressive. I will oppose any effort to impose a flat income tax, which would unfairly burden the poor as surely as our flat sales tax does.

  32. Jason 2018-11-05 22:51

    Great idea MHR. Then people will go across the border and buy them.

    You are truly a smart person……

  33. Drey Samuelson 2018-11-05 22:52

    I’m not a fan of Mark Mickelson after he turned himself into a guided missile to essentially destroy the ballot initiative process in South Dakota, but I voted for IM-25 because I detest cigarettes even more than I’m angry at Mickelson. After watching my addicted mother waste away and die after smoking for 70 years, I’d vote to raise cigarette taxes even if the money derived was thrown in a ditch and set on fire… As Cory noted, the more expensive tobacco products are, the fewer people will use them, and fewer people will die like my mom did. So odd as it sounds for me to say it, I’m with Mark Mickelson on this one.

  34. Jason 2018-11-05 22:54

    Drey,

    Do you know what the second highest cause of lung cancer is?

  35. MHR 2018-11-05 23:07

    Jason: let smokers waste their gas $ and go wherever they want to buy tobacco – Drey: “I’d vote to increase cigarette taxes even if the money derived was thrown in a ditch and set on fire” AMEN! – vote YES on Initiated Measure 25!

  36. Jason 2018-11-05 23:11

    Smokers won’t waste their gas money. They will pay the same price, the bootlegger will make a profit, and South Dakota will lose money.

    Like I said earlier, you are truly smart…………..

  37. Porter Lansing 2018-11-06 05:02

    Ignore Jason, today. It’s not time to get into an argument with someone from MN trying to disrupt a peaceful Election Day.

  38. leslie 2018-11-06 07:07

    Interesting that the national statistic is a problem drinker on average loses 25 years of productivity before successful abstinence. Former heavy smokers say about the same thing: 25 YEARS!

    As usual our liberal friend from IA (mfi) is right on the mark. It’s time we got a handle on addiction.

    Tax addicts to pay for job training? ygbfkm

    Educate the populace in liberal arts, science and vocation. That’ll cure addiction, wrest wealth monopoly of the 1%, continue the pivot from fossil fuels, and save the planet from capitalistic (mainly deplorable Republican) vultures.

    Pretty simple concept. Take the mic away from Rupert Murdoch’s spawn. Elect liberal Democrats EVERY TIME.

  39. Ryan 2018-11-06 16:55

    bcb – you know the tax is wrong, so vote no. You are struggling with whether or not you support actual freedom or fake freedom, which is a just and right struggle…but you seem to know how you feel about the mis-directed tax. Vote your gut.

    bubba – I agree completely. Too many friggin better-than-you types complain about the health effects of other people smoking while they sit all day on their heavily medicated butts eating fast food and being completely sedentary. But those darn smokers, we need to tell em what to do!

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