Health and Healthcare

Taxing Tobacco to Reduce Smoking

As smoking as dropped in developed countries, tobacco companies, which include Philip Morris International Inc. (NYSE: PM), have focused on developing countries and the third world. If the World Health Organization (WHO) has its way, increases in national tobacco taxes may curtail tobacco use around the world.

The WHO has released a reported titled “WHO Report on the Global Tobacco Epidemic 2015.” The argument made in the document is simple. Making people pay more for tobacco cuts use. And the WHO claims it can prove it.

The health organization report says some nations barely tax tobacco at all, but they should:

Too few governments levy appropriate levels of tax on cigarettes and other tobacco products. They therefore miss out on a proven, low-cost measure to curb demand for tobacco, save lives and generate funds for stronger health services

The number of countries that bother to tax tobacco at any substantial rate at all is too small to make a major dent in tobacco use in developing and third world nations:

The report focuses on raising taxes on tobacco. Although 33 countries impose taxes that represent more than 75% of the retail price of a packet of cigarettes, many countries have extremely low tax rates. Some have no special tax on tobacco products at all.

The report supposes that the countries have any substantial reason to cut tobacco use at all. What the WHO does not report is whether the political weight of smokers keeps governments from increasing taxes. And tobacco companies have a huge incentive to back that lack of high tolls.

ALSO READ: 5 Big Upcoming FDA Decisions Expected in July

Still, the WHO prescriptions for cutting tobacco use are simplistic:

  • Monitor tobacco use and prevention policies;
  • Protect people from tobacco smoke;
  • Offer help to quit tobacco use;
  • Warn people about the dangers of tobacco;
  • Enforce bans on tobacco advertising, promotion and sponsorship; and
  • Raise taxes on tobacco.

As if people cannot figure out the reasons to stop tobacco use on their own.

Sponsored: Want to Retire Early? Start Here

Want retirement to come a few years earlier than you’d planned? Orare you ready to retire now, but want an extra set of eyes on your finances?

Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.

Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.