Photo: Philip Morris Intl
The World Health organisation (WHO) Framework Convention on Tobacco Control said it will discuss creating its own recommendations for member states on cigarette taxes at a November conference in Seoul, South Korea.According to the draft guidelines, “The main objective of the guidelines is to assist Parties in developing efficient and effective tax and price policies that meet their needs in terms of reducing tobacco consumption and prevalence, bearing in mind the significance of revenues gained from taxes on tobacco products.”
The goals of the policy prescriptions are quite lofty, but any action by the WHO will lack the teeth to enforce them — the transnational organisation may be allowed to prescribe recommendations, but it does not have the power to enforces taxes upon sovereign nations.
This means that their advice could easily fall on deaf ears — but they don’t have to.
Many of the recommendations are too vague, and some states do not have the resources to enact or analyse the effect of tobacco taxes. And some don’t want to, which is their sovereign right.
Here’s one example. The draft guidelines note:
Parties should implement the simplest and most efficient system that meets their health and fiscal
needs, with the fewest exceptions and taking into account their national circumstances.
This advice does not give specific policy recommendations for a specific state. The tools to combat or consider “national circumstances” differ widely according to each specific situation. Further, not all states will have the same capacity to enact taxes or to analyse and work around their circumstances.
However, this specific recommendation adds:
From a budgetary as well as a health point of view, Parties should implement specific or mixed excise systems with a minimum specific tax floor, as these systems have considerable advantages over purely ad valorem systems
This provides a more specific policy analysis, but as noted before, not all states have the resources or the time to combat this.
Patrick Reynolds, executive director of the Foundation for a Smokefree America, told Business Insider that he thought the discussion was “wonderful” and “exciting.”
“To say that all taxes are generally bad is foolish,” Reynolds, who is the grandson of cigarette company founder RJ Reynolds, added. “Tobacco taxes means less smoking and savings on long term healthcare costs.”
In an op-ed with USA Today on Wednesday, Reynolds noted, after a 62¢ federal tobacco tax increase enacted in 2009 caused cigarette sales to drop 11 per cent in the first 12 months, and raised more than $10 billion in the first year.
Not all support cigarette taxes, and they have their own data to back their claims.
RTI International released a study in September in which it found that higher cigarette taxes are financially burdensome on low-income smokers in the United States, and do not make them more likely to quit. And according to the centre for Disease Control (CDC), almost a third of those who make under $15,000 a year smoke.
David Sutton, a spokesperson for the Altria Group — the parent company for some of the biggest tobacco manufacturers in the United States — responded to Business Insider via email. Here’s what they had to say:
“Tobacco products are already very heavily taxed. Since 2000, federal and state governments increased cigarette excise taxes over 110 times, more than doubling the price of a pack of cigarettes. Philip Morris USA opposes tobacco product excise tax increases that are unfair to adult tobacco consumers, create additional incentives for contraband and counterfeit tobacco product trafficking, harm states by increasing incentives for adult tobacco consumers to buy tobacco products through lower-tax or untaxed revenues, are costly to legitimate businesses, including retailers and wholesalers, do little to solve systemic state budget problems and can lead to less stability in the states’ finances.”
Cigarette taxes have faced their share of opponents in the United States as well. Proposition 29 in California, which would have added a $1 tax per pack, was defeated in a statewide vote in June.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.