Tobacco Taxes Grow Globally, But Do They Really Work?

Smokers such as this one keep puffing away in spite of skyrocketing tobacco taxes in places like Egypt and New York City.
Smokers such as this one keep puffing away in spite of skyrocketing tobacco taxes in places like Egypt and New York City.

New York City residents are now the heaviest-taxed people in America, when it comes to their smokes. Thanks to new law that took effect earlier this month, a pack of cigarettes in NYC now costs over $10, and more than $8 per pack elsewhere in the Empire State. That tax rise also affects cigars, smokeless tobacco and other tobacco products.

The higher New York tobacco taxes are expected to raise nearly $300 million in state revenues for the 2010-2011 fiscal year, while saving the state billions of dollars in future health costs. "This tax increase should be the motivation smokers need to give up this deadly addiction for good," New York's health commissioner said in a recent press release.

Decades-Old Anti-Tobacco Campaigns

Decades of government restrictions, awareness programs and anti-tobacco campaigns have greatly reduced smoking in the U.S. from its post-World War II highs. And there's a growing international understanding of the health and financial damages tobacco can have.

New York City has enacted its largest tobacco tax hike ever, bringing some cigarettes to more than $10 per pack.
New York City has enacted its largest tobacco tax hike ever, bringing some cigarettes to more than $10 per pack.

The World Health Organization (WHO) estimates that, worldwide, tobacco use kills 5 million people each year, most of whom live in low- and middle-income countries. That's in spite of the 7-year-old WHO Framework Convention on Tobacco Control (FCTC), which covers 86% of the world's population and "demonstrates the global political will for making tobacco control far more comprehensive and successful."

It's not only smokers in New York that are feeling the pain of higher cigarette prices. The price of smoking in Egypt, which has one of the highest cigarette-consumption rates in the Middle East and North Africa, doubled this month as the government hiked tobacco taxes. "Some people will be angry for some time," a top health ministry official told the Associated Press, "but I think it will decrease the consumption of tobacco."

Higher Prices = Less Smoke?

But does raising tobacco prices really deter smokers? Probably not, considering that tobacco is such an addictive substance, says Randall Kuhn, director of the Global Health Affairs Program at the University of Denver's Josef Korbel School of International Studies. "You'd give up almost anything before cigarettes, " he says. "People often downgrade brands [when tobacco prices rise]. Cigarette companies are usually prepared with a lower brand, in case you need to downgrade."

What's more, a new report from Canada found that higher tobacco taxes there -- intended to reduce smoking -- have instead helped to fuel an active, gang-controlled black market in contraband cigarettes.

That's bad news for anti-tobacco campaigns that still have plenty of other challenges to contend with. In some developing nations, for example, smoking is a long-standing part of the culture and local economy, Kuhn says. That makes it far less likely those countries will take strong steps to stop smoking anytime soon.

The most obvious example is China, the world's largest producer and consumer of tobacco. China has 350 million smokers, with 100 million of those smokers under the age of 18. "China is seemingly quite schizophrenic on this," Kuhn says, "because [the] state-run monopoly in China is gaining control over the global tobacco market." At the same time, he notes, the Chinese government has paid a lot of attention to reducing mortality rates -- including the launch of several national smoking intervention programs.

Smoking Likely to Continue for Generations

Unsurprisingly, the tobacco industry also has pushed back against anti-tobacco measures. In Jakarta last month, tobacco growers from six Asian countries signed a declaration against FCTC recommendations to ban sweeteners, spices and other ingredients in tobacco products.The proposal, they say, could end up costing tens of millions of tobacco-related jobs worldwide.

The idea of eradicating tobacco use is probably "off the radar," Kuhn says. "As long as there are smokers out there, as long as there's a memory of smoking, then it will be transmitted to future generations. Any kind of ratcheting down would have to take place over hundreds of years."

And there are political considerations, along with financial considerations, that need to be taken into account when it comes to tobacco. "There are a lot of countries that don't have very effective states and don't have legitimacy, and they're nowhere near pursuing anything like [a tobacco tax]," Kuhn says.

But, he adds, every international effort has its leaders and followers. "There will always be a country that is pivotal -- that if you can do it here, you can do it anywhere. If tobacco smoking is ever going to end globally its not going to be China that's the bellwether, it's going to be [a nation like] Egypt."