Cigarette Excise Tax Increase Would Save Lives and Money for Hoosiers

INDIANAPOLIS – A research report to be released by the Center for Health Policy shows that an increase in Indiana's cigarette excise tax would save lives, lower the state's high smoking rate, and ease costs for society.

Eric Wright, director of the Center for Health Policy, said that "Indiana has the second highest smoking rate in the nation, and while almost everyone knows that smoking damages the health of smokers themselves, many do not realize that the costs to society are also high. These costs include higher healthcare premiums, taxes to cover smoking-related Medicare and Medicaid, lost productivity, higher rates of premature death, and complications for infants from maternal smoking. There are also fires caused by cigarettes and effects from sidestream smoke, especially for children who live with smokers."

Wright said that if the state increased the cigarette excise tax enough to raise cigarette prices substantially, Indiana could expect some definite changes. "Historically, a tax increase that raises cigarettes prices is followed by lower cigarette sales. Some smokers quit. Some smoke less. And some would-be smokers don't start. This improves the health of the people involved, and it also benefits society."

Analysts who have studied the costs of smoking say that a pack of cigarettes costs society $7.50 because of disease, premature death, and lost productivity. "Some analysts who have included other factors have pegged the cost to society as high as $40 a pack for lifetime smokers," said Wright.

According to research reported by the Center, a $0.50 per pack increase in the state cigarette tax would have these estimated effects:

• reduce cigarette sales by 32 million packs a year,
• lead 34,000 adult smokers to quit,
• prevent 48,000 youth from taking up smoking,
• prevent 23,000 premature deaths caused by smoking,
• generate significant reductions in healthcare spending, and
• raise more than $280 million annually in new revenue for Indiana from the increase in cigarette excise taxes.

To discuss possible policy choices, including taxation, on the smoking rate in Indiana, the Center for Health Policy is sponsoring a health policy forum on Wednesday, November 15, 2006, at 1:15 p.m., in the auditorium of the Indiana Government Center, South Conference Center. The forum is also sponsored by the Center for Urban Policy and the Environment and the School of Public and Environmental Affairs at Indiana University-Purdue University Indianapolis.

Speakers at the forum will include two national experts on reducing tobacco use: Dr. Corinne G. Husten, MD, MPH, acting director of the Office of Smoking and Health for the Centers for Disease Control and Prevention, and Frank J. Chaloupka, PhD., a distinguished professor of economics at the University of Illinois at Chicago, and director of the UIC Health Policy Center. Dr. Chaloupka is also director of ImpacTeen, a policy research partnership for healthier youth behavior, and co-director of the International Tobacco Evidence Network.

At the forum, the Center will distribute copies of its research report, State Cigarette Tax Increase Would Cut Smoking Rate and Ease Costs. The report will also be available beginning on that date via the Web site sponsored by the Center for Urban Policy and the Environment (http://www.urbancenter.iupui.edu/).

For information about the forum or to pre-register, visit the Center's website (http://www.urbancenter.iupui.edu/aboutthecenter/news_result.asp?newsid=78). The forum is free and open to all. Preregistration is encouraged, but not required.