The debate at the State Capitol over increasing the tax on tobacco has played out the same way year after year. It goes like this:
Public Health Claims. Public health advocates point to price elasticity research showing that taxing cigarettes, and thereby increasing the cost of cigarettes, is the most effective way to motivate smokers to quit and prevent teens and young adults from starting down the path to addiction. Consequently, increasing the tax on tobacco is the single most effective way to reduce tobacco-related death and suffering, and the related costs.
Smokers’ and Political Reporters’ Claims. But smokers, and political reporters, portray the tobacco tax very differently. They describe the tobacco tax as nothing more than a politically expedient way to raise money. Because only about 19% of Minnesotans smoke, they say politicians are just picking on an oppressed minority. Moreover, smokers’ rights advocates scoff at arguments about the tobacco tax reducing tobacco use, saying “people will continue to smoke regardless of the tax.”
What About The Tobacco Industry Experts?
But what about tobacco industry officials themselves? In their private unguarded moments, what do they say about the impact of the tobacco tax on smoking behaviors? After all, probably no one has studied this issue more carefully and thoroughly than them.
Fortunately, we don’t have to speculate. We know. The answer can be found in an office park in north Minneapolis. As absurd as that sounds, I’m not kidding. To be precise, the answer is at 980 East Hennepin Avenue. This is the entirely underwhelming home of something called the “Minnesota Tobacco Document Depository.”
A little background might be helpful. A few years back, you may recall that Minnesota went after the tobacco industry over violations of Minnesota consumer fraud and anti-trust laws. As a result of that action, the tobacco industry agreed to pay Minnesota a $6.1 billion settlement.
Unfortunately, Minnesota state legislators have shamelessly frittered away most of the lawsuit proceeds like drunken sailors. However, we do have something left over from that lawsuit settlement — a mountain of internal tobacco industry documents that tell us precisely what the tobacco industry has learned about a wide variety of subjects.
So, I looked back at some of those documents. It turns out that tobacco industry experts know a lot about the impact of tobacco taxation on smoking behavior, probably more than anyone in the Minnesota Legislature could ever know.
So, let’s let the industry experts speak for themselves:
“When the tax goes up, industry loses volume and profits as many smokers cut back.” – Philip Morris, 1994
“Of all the concerns, there is one – taxation – that alarms us the most. While marketing restrictions and public and passive smoking [restrictions] do depress volume, in our experience taxation depresses it much more severely…” – Phillip Morris, 1985
“If prices were 10% higher, 12-17 incidence [youth smokng] would be 11.9% lower.” – RJ Reynolds, 1982
“It is clear that price has a pronounced effect on the smoking prevalence of teenagers, and that the goals of reducing teenage smoking and balancing the budget would both be served by increasing the Federal excise tax on cigarettes.” – Philip Morris, 1981
“A high cigarette price, more than any other cigarette attribute, has the most dramatic impact on the share of the quitting population…price, not tar level, is the main driving force for quitting.” – Philip Morris, 1993
There you have it. If Minnesota legislators want to motivate more smokers to quit and discourage young people from starting, increasing the tobacco tax works like a charm.
On the other hand, if legislators want to keep the price of cigarettes lower — in the name of gallantly “protecting smokers” — more Minnesotans will remain smoking, become addicted to smoking, and ultimately suffer and die from smoking-related diseases.
That’s not some public health do-gooder’s earnest claim. That’s not some political reporters’ cynical analysis of legislative gamesmanship. That’s straight from the camel’s mouth.
Note: The author was the communications director for the Minnesota Attorney General’s office during part of the tobacco lawsuit referenced in this post.
Note: This post was featured in Politics in Minnesota’s Best of the Blogs and MinnPost’s Blog Cabin.