8/2/10

1

Advancing  the  tobacco  tax  agenda  for  health  promo5on  

Kelly  J.  Henning,  MD  

Bloomberg  Philanthropies  

Health  Promo:on  Funding  and  Tobacco  Tax  Seminar  UP  College  of  Law,  University  of  the  Philippines  

Quezon  City,  June  22  2010  1  

Tobacco  Is  Now  the  World’s  Leading  Single  Agent  of  Death  

Unless urgent action is taken, tobacco will soon kill twice as many people and will kill 1 billion people this century

World Health Organization 2  

8/2/10

2

Raising  Tobacco  Taxes  is  Integral  to    Tobacco  Control  

•  The  Par:es  recognize  that  “price  and  tax  measures                    are  an  effec:ve  and  important  means  of  reducing                    tobacco  consump:on.”                                                                                                        Ar:cle  6,  FCTC  

•  “Increasing  the  price  of  tobacco  through  higher          taxes  is  the  single  most  effec:ve  way  to  decrease    

             consump:on  and  encourage  tobacco  users  to  quit.”                                      MPOWER  report  2008  

•  Tobacco  taxes  raise  revenues  AND  yield      significant  public  health  gains  

3  

Tobacco  Taxes  in  New  York  City  

8/2/10

3

Adult  Smoking  in  NYC  Down  Almost  30%  Since  1993  

% o

f adu

lts

City and State tax increases

Smoke-free workplaces

Free patch programs

3-yr average 3-yr average 3-yr average

Media campaigns

Current  NYC  Tobacco  Taxes  

•  Total  tax  on  a  pack  of  cigare[es  is  almost  $6.00  

•  Highest  combined  state/local  tax  in  U.S.  •  NYC  and  NY  State  both  specific  taxes  ($  per  pack)  •  Total  pack  price  is  approximately  $9.20  •  Tax  accounts  for  65%  of  NYC  pack  price  (World  Bank  noted  level)  

Excise Taxes Federal $1.01 State $2.75 City $1.50

Sales Taxes City & State $0.71 TOTAL $5.97

8/2/10

4

Changes  in  CigareLe  Excise  Taxes    NYC  and  NY  State  

Total = $1.58

Total = $3.39

Total = $5.26

Total = $4.64

Smoking  Prevalence  Declined  as    NYS/NYC  CigareLe  Taxes  Increased    

Adults  1997-­‐2009  

NYC and NYS tax increases

NYS tax increase

Federal tax increase

8/2/10

5

Smoking  Prevalence  Declined  as    NYS/NYC  CigareLe  Taxes  Increased    

Youth  1997-­‐2009  

City and State tax increases

NYC and NYS tax increases

NYS tax increase

Federal tax increase

Data  to  Advocate    for  Tax  Increases  

•  Data  is  a  powerful  tool  –  Baseline  prevalence,  consump:on,  prices,  brands  

–  Tax  structure  and  processes  to  increase  taxes  –  Tracking  changes  over  :me  

•  Real  prices  •  Reduc:on  in  tobacco  use  and      prevalence  

•  Lives  saved  •  Revenues  increased  

8/2/10

6

Tobacco  Tax  Revenues  

Tobacco  Excise  Tax  Revenues  NYC:  Smoking  Prevalence  Decreased    

while  Revenue  Increased  Nearly  Tenfold  

12  

8/2/10

7

Total  Tobacco  Tax  Revenue    FY  2001-­‐2009    

•  NYC  collected  $946,198,0001  

–  46%  of  tobacco  tax  revenue  transferred  to  NYS  –  Remaining  54%  goes  to  NYC  General  Fund  

•  NY  State  collected  $9,059,011,2492  

–  Tobacco  tax  revenue  split  between  NYS  General  Fund  and  health  care  reform  fund  

1. The Office of the New York City Comptroller. Comprehensive Annual Financial Report of the Comptroller for the Fiscal Year Ended June 30, 2007. New York: October 31, 2007.

2. New York State Department of Taxation and Finance. Annual Statistical Report of New York State Tax Collections Statistical Summaries and Historical Tables. Available at: http://www.tax.state.ny.us/statistics/stat_fy_collections.htm

Tobacco  Excise  Tax  Revenues  

•  Do  not  decline  when  taxes  are    

           increased  –  even  when  accoun:ng          for  reduced  consump:on  

•  Taxes  directly  strengthen  tobacco  control  

•  Revenues  have  a  second  round  of  benefits  if  invested  in  health  priori:es,  including  tobacco  control  and  health  promo:on  

14  

Waters et al. The Economics of Tobacco and Tobacco Taxation in Mexico, 2010

Mexico Tax Rates and Real Excise Revenues 1981-2008

8/2/10

8

Using  Tobacco  Excise  Tax  Revenues  

•  Dedicated  tobacco  taxes  to  support  tobacco  control  ac:vi:es  including  “health  promo:on  founda:ons”  and  comprehensive  tobacco  control  programs”  –  Thai  Health  Founda:on  

•  Other  countries  dedicate  part  of  tobacco  tax  or  other  tobacco-­‐related  revenues  for  tobacco  control  and/or  health  promo:on:  –  India,  Nepal,  Peru,  Estonia,  Poland  –  Several  US  states  –  Poland  (0.5%),  Finland  (0.75%),  Iceland  (0.9%)  of  tobacco  tax  revenues  

15  

Tobacco  Excise  Tax  Revenues  

Thailand  •  A  2%  tax  surcharge  earmarked  for  a  broad  agenda,  including    funding  the  

Thai  Health  Promo:on  Founda:on  (Thai  Health)    

•  Autonomous  state  agency  outside  the  formal  structure  of  government.    

•   Ac:vi:es  –  Tobacco  control  

–  Alcohol  consump:on  control  

–  Traffic  injuries,  disaster  preven:on  

–  Health  risk  factors  

16  

8/2/10

9

Tobacco  control  is  underfunded  

17  

Country-­‐level  ques5ons  for  health  promo5on  founda5ons  

•  Tobacco  taxa:on  –  MPOWER:  how  much  progress?  

–  Tobacco  tax  levels:  rela:ve  to  neighbors,  region,  best  prac:ces  –  Tobacco  excise  tax  structures  –  Tobacco  excise  tax  revenues  over  :me  

–  Use  of  tax  revenues  (general  funds?  specific  uses?)  

•  Health  Promo:on  

–  What  structures  exist,  and  how  are  they  financed  currently?  

•  And  how  is  tobacco  control  funded?  –  A  key  health  promo:on  ac:vity,  itself  underfunded  

18  

8/2/10

10

Thank  you  

19