Cigarette prices rise and countries save millions

Cigarette prices rise and countries save millions

Simply raising the prices of cigarettes would cut smoking rates and save millions of lives all over the world each year.

As reported in an article in MedPage Today on November 28, 2012, James Baumgardner, PhD, deputy assistant director for health policy at the CBO, and colleagues wrote that “Increasing the US federal excise tax on cigarettes by 50 cents a pack would save lives and, in the long run, reduce the federal deficit even though people would be living longer on Medicare. Raising the cigarette tax - currently at $1.01 per pack - would cause 1.4 million adults to quit smoking and save 10,000 lives in its first decade, the Congressional Budget Office (CBO) predicted. Those numbers would increase to 3 million and 200,000 respectively by 2085. Despite an uptick in long-term health spending because more people would live longer, additional revenue from the cigarette and income taxes taken together “would lead to a net deficit reduction in the primary deficit in every year through 2085” - because of the increased revenue generated by the tax itself and through more taxes being paid by people who would be working for a longer amount of time”.

Study by Baumgardner JR, et al “Cigarette taxes and the federal budget - Report from the CBO” as published in the New England Journal of Medicine, as released Wednesday 28 November 2012; 367: 2068-2070.

Posted: Wednesday 1 May 2013