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TAX STUDY COMMISSION’S RECOMMENDATIONS ON CIGARETTE TAX INCREASE FALL SHORT News

Posted Wednesday, August 20, 2008

Jackson, Miss— The Governor’s Tax Study Commission did not go far enough by recommending an 18 or 32 cent cigarette tax increase. A cigarette tax increase of 18 or 32 cents—the amounts offered in the Commissions draft report— is directly in line with the tobacco industry’s acceptable scale because these miniscule amounts would have no effect on youth smoking.

The Communities for a Clean Bill of Health (CCBH) continue to recommend that the legislature adopt a $1 cigarette tax increase in its final report.  CCBH is a statewide coalition of health organizations and individuals that includes the Mississippi affiliates of AARP, American Cancer Society, American Heart Association, American Lung Association, Children’s Defense Fund, the Mississippi Health Advocacy Program, the Mississippi Nurses Association and the Partnership for a Healthy Mississippi.

The Commission should not consider a cigarette tax increase solely as a revenue generator but as an opportunity to provide a long-term healthcare investment for Mississippi. The Governor and the Commission have labeled this tax study initiative as one that will not be “piecemeal” but “holistic” in its approach to spur greater investment and prosperity for the state. “Suggesting a relatively insignificant cigarette tax increase just for the sake saying ‘we increased the cigarette tax’ is the definition of piecemeal,” said Roy Mitchell of the Mississippi Health Advocacy Program. 

A $1 cigarette tax increase would serve a two-fold purpose. It would provide the state with sustainable funding for health care programs, while reducing cigarette consumption to levels that would lead to over $1 billion in health care savings. Overall, a $1 cigarette tax increase would result in:

      46,100 kids alive today, who will never becoming smokers
      $9 million in 5-year savings from reducing smoking during pregnancy
      $13.7 million in 5-year savings from reduced heart attacks and strokes
      $174 million in additional revenue
      $1 billion in Long-term healthcare savings

An 18 or 32 cent increase would result in no reduction in smoking and none of the health care savings needed in Mississippi. Study after study— from the Centers for Disease Control and Prevention, the John C. Stennis Institute of Government, and even tobacco giant Phillip Morris – reveal that cigarette tax increases are the strongest way to reduce smoking, particularly among youth. It is only with a $1 increase that we reach the maximum health and financial benefits of a cigarette tax. Numerous studies have found that for every 10 percent increase in the price of cigarettes there is a 3 percent to 5 percent reduction in overall cigarette consumption.

Mississippi’s current cigarette tax, which has not increased since 1985, is 18 cents—a full dollar below the national average of $1.18. An increase in Mississippi’s cigarette tax should be an investment in the state’s future—a $1 increase is that investment.

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