How a Tobacco Tax Increase Can Save S.C. Billions by Snuffing Out New Smokers

Tobacco use remains the leading cause of preventable death in the United States. Taxes are an important part of preventing younger smokers from starting.

Last year, the Campaign for Tobacco-Free Kids published this report about the impact of cigarette taxes. They found that a 10% increase in tobacco taxes translated to a 7% reduction in children who smoke.

Lower cigarette prices mean a more affordable product for young smokers. Over 100,000 South Carolinians who are now under age 18 will die prematurely from smoking-related illnesses.

Tobacco use is price-sensitive, meaning that its use has a direct relationship to its price. After a $0.50 per pack cigarette tax increase back in 2010, South Carolina experienced a sharp downturn in the number of cigarette packs sold.

Source: Tax Burden on Tobacco, 2016

What If You Could Save a Life For $1.50?

Currently, S.C. ranks 45th in the nation in terms of tobacco taxes, which amount to $0.57 per pack.

Source: Truth Initiative

Current projections indicate raising the cigarette tax by $1.50 would raise an estimated $264.51 million in additional annual revenue. Long-term health care cost savings from a decline in smoking are an estimated $1.31 billion. Increasing the tax on other tobacco products (i.e. smokeless tobacco and cigarillos) to an equal rate would raise an additional $61.4 million in revenue, make it less likely kids will try other tobacco products, and discourage product switching (Source: ACS CAN, Campaign for Tobacco-Free Kids, and tobacconomics).

Even though the number of cigarette packs sold has decreased, tax revenues have increased nearly five times that of previous years and have remained consistent since the $0.50 per pack increase.

Source: Tax Burden on Tobacco, 2016

Despite increased tax revenues, tobacco use leads to an increased financial impact for all South Carolinians. As of November 2017, nearly $5 billion was spent on tobacco-related costs such as:

· Healthcare costs: $1.9 billion

· Medicaid spending: $476 million

· Lost productivity: $2.35 billion

Even non-smokers pay the price for tobacco use. Each household pays $911 in state and federal taxes per household due to smoking-related government expenditures.

How You Can Help

Preventing tobacco-related deaths through higher tobacco taxes is part of a comprehensive strategy. Learn more about establishing a smoke-free environment for your community below:

· Read more about model policies to reduce tobacco use.

· Download our Smoke-Free Communities toolkit.

· Learn more about SCTFC’s legislative agenda here.

· Also, download our infographic about this topic here.

Jenn Hamilton

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