Impacts and Regulations of Tobacco Taxation on Usage

Impacts and Regulations of Tobacco Taxation on Usage

Tobacco is one of the most commonly abused drugs in the world. Many people smoke tobacco in either the form of industrial manufactured cigarettes, physically hand rolling the tobacco with their chosen paper and in recent years, e-cigarettes. Smoking tobacco has not only had numerous detrimental effects on the human health but the smell itself lingers on those, physically and orally. The surrounding environment is also greatly affected. There are also studies that have shown a reduction in an athlete’s performance when constantly smoking tobacco. Those who are addicted to the nicotine found in tobacco, become more susceptible to not only developing an increase in higher heart rate but a higher increase in blood pressure. Young adults especially are at a higher risk of not only gaining these developments but exhibiting faster symptoms. Other health problems that have been associated with the use of smoking tobacco include chronic bronchitis, lung cancer, emphysema, ischemic heart disease, hypertension and many more. According to the Center for Disease Control and Prevention, approximately 40 million adults within the United States still smoke cigarettes despite the ill side effects which doesn’t include the 4.7 million middle school and high school students that try at least one tobacco product. Every day, nearly 1,600 United States citizens that are under the age of 21, smoke their first cigarette.¹ Roughly half a million die prematurely due to smoking tobacco or inhaling second-hand smoke.

Due to such a decline in national health, the United States has regulated the sale and distribution of tobacco products in numerous means. Such include the governmental regulation of setting the age limit to be under 21 as well as taxing all tobacco products. In the economic world, tobacco wars have proven to be one of the serious issues that are constantly faced. The sale of tobacco has also proven to be inelastic. Globally, governments have implemented heavy taxes in an attempt to reduce the sale of tobacco products. Despite the increase in the cost of tobacco products, it’s been shown that demand and payment can still remain the same. The relatively low-price elasticity of the demand in the tobacco market garners a result in higher tax revenues than any other market. Every government is fully aware that the demand for tobacco is so high. It’s also been demonstrated that a tax increase can effectively reduce cigarette use. While the demand for tobacco products may not be as elastic as the demand for the copious amount of other consumer products, research has consistently indicated that increases in the price of tobacco products are followed by moderate falls in the percentage of people smoking, the amount and or the number of tobacco products that remaining smokers consume. The percentage of people smoking declines as a result of the tax increase. According to the Center for Disease Control and Prevention, increasing the price of tobacco products is the single most effective way to reduce consumption. A 10% increase in price has been estimated to reduce overall cigarette consumption by 3–5%. Research on cigarette consumption suggests that: both youth and young adults are two to three times more likely to respond to increases in price than adults’ lower income populations are more likely to increase quit attempts or smoke fewer cigarettes in response to price increases, although desire to quit and successful cessation may not be consistent across all racial and ethnic groups. Such a tax increase then discourages non-users from starting, encourages current users to quit and, also most importantly, discourages former smokers from starting again. Due to the increase in tobacco taxes resulting in higher tobacco prices for everyone, the effect of even small resulting reductions in tobacco use can be very large across the whole population.

In Trinidad and Tobago, the Tobacco Control Act further illustrates the laws and policies that are enforced in order to prevent the use of tobacco for not only health purposes but for the economic market and demand for the product. The act was implemented to prohibit the use of tobacco from children, persons under the age of 18, as well as regulate the daily use by individuals. By doing so, the law further impedes most forms of tobacco advertising and promotion. This is with the exceptions for information advertising or brand-preference advertising in certain publications and on certain signs. There are also limited exceptions for brand marking, brand stretching, and “normal” trade rebates. Although sponsorship by the tobacco industry is not fully restricted, the propaganda of the sponsorship is prohibited.

The law requires rotating text and pictures detailing the harm of tobacco products. A health warning must also cover at least 50 percent of the front and back surfaces of tobacco product packaging. Misleading packaging and labeling, including terms such as “light” and “low tar” and other signs, is prohibited.

The law grants the authority to regulate the contents of cigarettes; however, no subsequent regulations have been issued. The law requires that manufacturers and importers must disclose to the government and authorities with the information on the contents and emissions of their products. The law prohibits the sale of tobacco products via vending machines, the internet, and in the following locations: schools and educational facilities; sports, athletic, and recreational facilities; healthcare facilities; and government buildings. However, the law does not prohibit the sale of single cigarettes or small packets of cigarettes. Similarly, in the United States, the FDA regulates the manufacture, distribution, and market of tobacco products. It’s main restriction of tobacco sales are also to children under the age of 21.The Tobacco Control Act requires that smokeless tobacco packages and advertisements must have larger and further visible warnings. Smokeless tobacco that are included in tobacco products are moist snuff, chewing tobacco, and snus. Tobacco companies must provide the FDA with detailed information about the ingredients in their products. Compared to other countries, they require tobacco company owners and operators to register annually. Those same company owners and operators must open their manufacturing and processing facilities to be subject to inspection by the FDA every two years. This allows the FDA to implement standards for tobacco products to protect public health. For example, the FDA has the authority to regulate nicotine and ingredient levels. They can also ban cigarettes with characterizing flavors, except for menthol and tobacco. The FDA funds the regulation of tobacco products through a user fee on the manufacturers of certain tobacco products sold.

Part 2 Arguments for and against

Truth Initiative argues that Tobacco taxes should be assessed at the highest possible rates to prevent youth from using tobacco products while at the same time encouraging adults to quit. Taxes are a particularly effective tool for discouraging youth uptake of cigarettes. Youth and young adults are two to three times more likely to respond to changes in prices than adults. It’s been noted that health economists have estimated that raising the cost of cigarettes to $10 per pack nationwide would result in 4.8 million fewer smokers between the ages of 12-25. In fact, researchers who compared youth use just before and just after the federal cigarette tax increase in 2009, found that the tax led to at least 220,000 fewer middle and high school students taking up smoking. Young people are especially more responsive to tax increases for several reasons, including their lower incomes, which make them more price sensitive and the shorter amount of time spent smoking compared to older smokers, which makes them more likely to be less addicted. Higher cigarette prices also increase the likelihood that adult smokers will quit. Tobacco taxes on all products should increase over time. Taxes must increase regularly to continue the effect of the taxes on reducing tobacco use. Moreover, increases in taxes should be meaningful and they should not be phased in, so that they have the strongest effect on changing tobacco use behaviors.

Work Cited

Bader, P., Boisclair, D., & Ferrence, R. (2011, November). Effects of Tobacco Taxation and pricing on smoking behavior in high-risk populations: A knowledge synthesis. International journal of environmental research and public health. Retrieved February 11, 2022, from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3228562/

CDC. (2021, May 25). Economic trends in tobacco. Centers for Disease Control and Prevention. Retrieved February 11, 2022, from https://www.cdc.gov/tobacco/data_statistics/fact_sheets/economics/econ_facts/index.htm

CDC. (2021, June 16). Tobacco use. Centers for Disease Control and Prevention. Retrieved March 8, 2022, from https://www.cdc.gov/chronicdisease/resources/publications/factsheets/tobacco.htm#:~:text=As%20of%202018%2C%20about%2034,41%2C000%20deaths%20from%20secondhand%20smoke.

Center for Tobacco. (2020). Family smoking prevention and tobacco control act. U.S. Food and Drug Administration. Retrieved February 11, 2022, from https://www.fda.gov/tobacco-products/rules-regulations-and-guidance/family-smoking-prevention-and-tobacco-control-act-overview#:~:text=The%20Tobacco%20Control%20Act%3A,of%20Ingredients%20in%20Tobacco%20Products

Ministry of the Attorney General and Legal Affairs. (2012). Laws of Trinidad and Tobago. Tobacco Control Act. Retrieved February 11, 2022, from https://rgd.legalaffairs.gov.tt/laws2/alphabetical_list/lawspdfs/30.04.pdf

Truth Initiative. (2019). The importance of tobacco taxes. Truth Initiative. Retrieved February 11, 2022, from https://truthinitiative.org/research-resources/tobacco-prevention-efforts/importance-tobacco-taxes