Already high tobacco taxes are still a burden on low-income households

High tobacco taxes have become widely adopted, partly in order to discourage smoking and thus improve public health. Critics of high tobacco taxes are concerned that, because tobacco smoking is often more prevalent (especially in higher income countries) among lower income people, tobacco taxes are regressive and harm low-income households. Policymakers considering further increases in tobacco taxes worry about further increasing the financial burden on low-income households.

In this issue of Tobacco Control, Verguet et al1 provide valuable information to such policymakers. They estimate the circumstances (including smoking prevalence, income gradient in prevalence of smoking and income gradient in the price elasticity of smoking) under which an increase in tobacco taxes will not further increase the average financial burden on lower income households, relative to higher income households. The authors conclude from these results that there are many specific circumstances under which increases in tobacco taxation are not regressive.

While…

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