Update: Please read why we only support a tobacco tax that has an actual effect on public health. HCF intends to pursue a substantial and impactful increase in the tobacco tax in the coming years.
HCF and many others came together in 2012 to advocate for a ballot initiative to increase Missouri’s tobacco tax from $0.17 per pack (the lowest in the nation) to $0.90 per pack. We were motivated by the robust evidence showing that high tobacco taxes reduce smoking, particularly by teenagers, pregnant women and low-income smokers. Although the 2012 effort narrowly failed, it solidified within the Foundation’s associates and directors a desire to pass a meaningful tobacco tax increase in Missouri.
HCF believes that Missouri can do better than to allow tobacco companies to write policies that will ultimately keep our state’s youth hooked on these deadly products.
Against this context, I am saddened to share that the Health Care Foundation has chosen not to support either of the currently proposed initiative efforts to increase Missouri’s tobacco tax. Tobacco taxes, when crafted well, are a powerful public health tool to decrease youth smoking and recognized by the CDC as one of the major predictors of a state’s smoking rate. The two tobacco taxes currently under discussion in Missouri — both funded in large part by tobacco companies — are crafted specifically to have little or even no impact on youth smoking. Tobacco taxes are effective to the extent that consumers feel a shock in pricing and change their behavior in response. Incremental and phased-in approaches, such as those currently proposed in Missouri, do not offer the price shock necessary.
Also of concern, neither proposal closes the allocable share loophole. This loophole in Missouri state law has made the state a dumping ground for cheap cigarettes manufactured by small tobacco companies. Unless this loophole is closed, Missouri will forfeit tobacco-settlement funds in the coming years; in 2015 alone, this loophole cost the state $50 million in funds for the state general revenue fund. While the proposal may raise money on one hand, it will lose money from the other. Quite simply, it robs Peter to pay Paul. Early childhood services or roads may benefit, but at the expense of the state’s general revenue fund.
This is one of those rare times when nothing is better than something.
Tobacco companies are offering Missourians a paltry increase in the tobacco tax rate that will maintain youth smoking and preclude any future attempts at meaningful increases in the state tobacco tax rate. HCF believes that Missouri can do better than to allow tobacco companies to write policies that will ultimately keep our state’s youth hooked on these deadly products.