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The Hidden Subsidy for the Tobacco Industry

Tobacco products are by far the biggest health scourge of the last 100 years, killing 100 million people in the 20th century and on track to kill 1 billion this century. In the U.S., tobacco will kill about 480,000 people this year, far more than AIDS, cocaine, heroin, alcohol, vehicular accidents, homicide and suicide combined. As bad as COVID was, at its peak it killed fewer people than tobacco. Up to 2/3 of people who smoke long-term will die because of their addiction.

There is another cost to tobacco that we talk about less frequently – the monetary cost to taxpayers. In the U.S., treating tobacco-caused diseases costs about $225 billion per year, and 60% of that cost is borne by taxpayers, whether they smoke or not. That’s $135 billion per year paid for by taxpayers, or an average of $405 for every person in the U.S. For a family of five, that amounts to $2025 every year. What could your family do with that money?

The tobacco industry business model goes like this:

  • Make the most highly addictive products on the market;
  • Aggressively advertise to youth (the vast majority of people who smoke were addicted before the age of 18);
  • Rake in huge profits;
  • Stick society with the resulting health bill.

 

You may say, “Wait, the tobacco industry pays taxes and payments under the Master Settlement Agreement.” But they don’t, not really. Those costs are included in the price and are paid by the people they’ve addicted.

What this amounts to is a subsidy for the tobacco industry. Governments collect your taxes and use some of that money to pay for the direct and knowable consequences of the tobacco industry’s business. Aside from Big Tobacco, the other winner in this obscene cycle are politicians that support the industry – the tobacco industry is always one of the top donors to political campaigns.

People addicted to nicotine pay the biggest price for our continued blind eye to the tobacco industry’s malfeasance. But we all pay, every day.

It’s time to eliminate the tobacco industry’s hidden subsidy by phasing out the sale of tobacco products. Make a donation to ASH today to make that vision a reality.