"Of all the concerns, there is one—taxation—that alarms us the most. While marketing and public and passive smoking restrictions do depress volume, in our experience taxation depresses it much more severely. Our concern for taxation is, therefore, central to our thinking. …"
That statement, in an internal Philip Morris document released in 1985, sheds light on the tobacco industry's strategy for the continued growth of cigarette sales. Since 1985, the state of Mississippi has obliged Big Tobacco and not increased its excise tax on cigarettes. At 18 cents per pack, Mississippi has the second lowest excise tax in the nation (New Jersey is the highest at $2.58).
In recent years, the medical field, health advocates and voters have applied pressure to legislators to increase the cigarette tax by $1. Gov. Barbour has even stated that the cigarette tax could be raised in conjunction with other tax changes. In response, the tobacco industry is pushing lawmakers this legislative session to adopt a minimal—25 cent—cigarette tax increase that they hope will appease the public while having little benefit for the state.
The tobacco industry understands the limits of what a quarter can do in regard to their product. They are fully aware that a 25-cent increase in Mississippi's cigarette tax will have no effect on the consumption of cigarettes in the state.
It is only with a $1 increase that we begin to reach the maximum health and financial benefits of a cigarette tax. Numerous econometric studies, including those conducted by Big Tobacco, 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. The average price of a pack of cigarettes in Mississippi is $3.55. If the Legislature increases the excise tax by only 25 cents, that would increase the average price to $3.80—only a 7 percent increase. That would have zero effect on consumption.
Increasing the excise tax by $1 would result in a 20 percent reduction in youth smoking and lead 23,400 adults to quit. The state would also save $971 million in long-term health-care costs while generating $184 million in new revenue from the excise tax.
Without exception, each state that has significantly increased its cigarette tax has experienced substantial increases in revenue and reduced smoking. The revenue from the tax increases have helped states balance budgets and helped to fund essential services like health care, education and tobacco-prevention programs.
Since 2002, Communities for a Clean Bill of Health has advocated for an increase in Mississippi's excise tax on cigarettes. The coalition is made up of more than 40 national, state and local organizations, including the American Cancer Society, the American Lung Association, the American Heart Association, AARP, Children's Defense Fund, Mississippi Health Advocacy Program and the Partnership For A Healthy Mississippi.
Whether the $1 cigarette tax increase is used to offset a decrease in the grocery tax or help stabilize funding for Medicaid, CCBH recognizes that the $1 cigarette tax increase alone would have a profound effect on the state. Mississippi would save nearly a billion dollars in long-term health care costs as a result of an estimated 42,000 kids who will never start smoking.
The negative effects of smoking and other forms of chronic illness hinder Mississippi's potential in significant ways. Mississippi has long been at or near the bottom of every health-care statistic. The situation is so dire that Dr. Ed Thompson, State Health Officer, coined the phrase "worst firsts" to describe the fact that Mississippi leads the country in the prevalence of diabetes, heart-disease death rate and age-adjusted death rate.
Big Tobacco is aware of the health and economic benefits for Mississippi if the cigarette tax is increased by $1. Their studies reveal the same figures as those stated above. They know the more cigarettes cost, the less people smoke—especially kids.
For more than 20 years, Mississippi's cigarette taxation policy has only benefitted the tobacco industry. Lawmakers will once again have an opportunity to change this policy in 2008. The decision before them is this: Whose side are they on— Big Tobacco or Mississippi's kids? Call your legislator and tell him or her to support the children of Mississippi by passing a $1-per-pack cigarette tax increase.
To join the CCBH mailing list or to learn more about the benefits of a $1 cigarette tax increase, visit http://www.ccbh.cc or call 601-353-0845.
Jarvis Dortch is a Communities for a Clean Bill of Health fellow with the Mississippi Health Advocacy Program. He occasionally writes for the Jackson Free Press.