Michael R. Bloomberg was mayor of New York from 2002 to 2013. Margaret Chan is director-general of the World Health Organization.
Around the world, about 6 million people die every year from a tobacco-related disease. That’s one person every six seconds, or 10 every minute. By 2030, 8 million people are expected to die each year from tobacco use — and 80 percent of those deaths will occur in developing countries. In the United States alone, smoking-related illnesses result in $170 billion in annual medical spending.
The cause of these problems — tobacco sales — can also contribute to their solution. The tobacco industry, which generates more than $35 billion in profits annually, should bear the costs it inflicts upon society. And there is a straightforward way to ensure that it does: taxation. Why, after all, should governments effectively subsidize tobacco companies by picking up the tab for the health-care costs they generate?
Increasing taxes on cigarettes and other tobacco products has mostly been a strategy for reducing usage — and it has proved incredibly successful. The evidence is clear that raising tobacco taxes cuts use, encourages smokers to quit and discourages young people from starting. In fact, the most price-sensitive demographic for tobacco use is young people, who tend to have less disposable income than their elders. Low-income populations are also sensitive to price increases, making taxes especially effective in poorer countries where tobacco use is rising fast.
Those same countries also have the greatest need for better health-care services. In addition to reducing the burdens on health-care systems, tobacco taxes can help countries absorb the huge costs imposed by tobacco usage. Fortunately, governments have begun waking up to the idea that tobacco taxes provide an opportunity to achieve both of those critical goals: reducing use and raising revenue. In South Africa, France and New Zealand, tobacco taxes have helped cut use and provided funding for health care.
In 2012, the Philippines passed its landmark Sin Tax reform law. This legislation, which increased tax rates on low-priced cigarettes by more than 300 percent, generates revenue for the country’s universal health-care insurance program. By 2014, these funds had helped the government subsidize the health-insurance premiums of approximately half the population.
The tobacco industry, of course, rejects the idea that it should pay for the long-term health costs its products generate, and it is working hard, directly and through front groups, to persuade governments to go easy on the taxes. If any other consumer product were known to kill one in two of its users, there would be calls on governments to ban it. Yet in much of the world, tobacco is only lightly regulated and taxed.
This is despite the fact that tobacco taxes have already been formally endorsed by governments representing 90 percent of the world’s people, through a legally binding global treaty — the World Health Organization Framework Convention on Tobacco Control — as an important and effective means to reduce tobacco consumption. The treaty even provides guidelines for governments to put in place or strengthen tobacco taxes.
If the primary role of government is to protect lives — and we believe it is — then tobacco taxes are an essential tool. The United Nations should encourage countries to raise tobacco taxes to support the world’s development goals and reduce tobacco use.
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