Worthwhile Battle

As cigarette prices have gone up in recent years, smoking has declined. But the U.S. surgeon general reports that smoking continues to account for 30% of all cancer deaths and 16% of deaths from all causes. According to Congress’ Office of Technology Assessment, smoking drains $65 billion a year from the economy in health-care and lost-productivity costs. That works out to an incredible $2.17 for each pack of cigarettes that Americans buy.

These losses might be arrested if cigarettes became more expensive. A stiffer federal tax is one way to do that. Rep. Anthony C. Beilenson (D-Los Angeles) proposes to increase the federal tax to 40 cents a pack, to be adjusted annually to the rate of inflation. It’s a good idea, on several counts.

First, it probably would discourage some smoking. Physician and economist Jeffrey E. Harris of the Massachusetts Institute of Technology has found that between 1981 and 1985 cigarette prices went up an average 36 cents as the federal tax doubled to 16 cents and manufacturers added big markups at the wholesale level. In that same period, per-capita cigarette consumption fell by 15%. Harris thinks that the price increases influenced 2 million people to stop smoking and dissuaded 600,000 teen-agers from ever starting. The price-consumption connection is a hard one to prove--certainly greater public awareness about the health dangers of smoking played a major role--but steeper prices may well have been a disincentive.

Second, the higher tax could ease the federal debt burden by raising nearly $5 billion in revenue from those who continue to smoke. No new tax is easily achieved. Winning approval for this one would require a monumental fight with the tobacco lobby and its friends in Congress. Given the potential gains, that battle is well worth waging.