How to make money out of quitting

By Kurt Kleiner in Washington DC GOVERNMENTS can improve their countries’ economies by taking tough action to limit cigarette smoking, according to a new report from the World Bank. It recommends raising taxes on cigarettes, banning advertising and investing in how-to-quit programmes. By 2030, according to the bank’s report, tobacco will be the leading cause of death in the world, killing 10 million people a year. The best way to reduce the number of smokers, it argues, is to increase taxes up to four-fifths of the retail price. In some countries, such as Britain, taxes are already this high. In low-income countries, however, taxes account for half or less of the retail price. Based on international data, the report’s authors argue that for every 10 per cent increase in taxes, the incidence of smoking goes down between 4 and 8 per cent. This would mean that tax increases would both reduce smoking and increase government revenues, the authors say, which could be used to pay for other anti-smoking measures. But other studies have concluded that higher taxes only encourage the smuggling of untaxed cigarettes. Economist Dwight Lee of Washington University in St Louis, for instance, found that a tripling of state cigarette taxes in Michigan in 1994 drove legal sales down 30 per cent. It also increased smuggling from nearby low-tax states and didn’t lower overall smoking. The World Bank report admits that smuggling is a problem, but says it should be possible to fight it effectively through better law enforcement. Anti-smoking groups have welcomed the World Bank report. “The most effective things we can do don’t cost any money,” says John Banzhaf, director of the US arm of Action on Smoking and Health,
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