Should we be giving tax breaks to tobacco companies?

   2   0 Blog, Taxing corporations

economist tobaccoFrom Citizens for Tax Justice in the U.S., a post that begins by discussing federal tax breaks for manufacturing corporations. And they ask:

Tobacco companies “manufacture” cigarettes—but do Americans, or lawmakers, really think it’s a good idea for the federal government to subsidise this activity? New financial reports from major corporations in this sector show that cigarette makers are enjoying substantial manufacturing tax breaks for producing products that kill people.”

It notes that Altria, the maker of Marlboros, cut its federal taxes by $799m over the past years just by using that deduction. (Also see work of our friends at the U.S. Campaign for Tobacco Free Kids.)

We’d add that Article 6 of the World Health Organisation’s Framework Convention on Tobacco Control is clear on the importance of tobacco tax, and this reflects scientific and political consensus on the extreme health costs – that is to say, deaths and lung cancer and other nasties – of not getting it right. Not taxing tobacco consumption sufficiently is one thing: subsidising production (of death) through the manufacturing deduction goes still further in the wrong direction.



This can only be seen as reflecting either very short and myopic policymaker horizons (trading what may or may not produce a job today, for a sure-fire slew of painful deaths tomorrow); or the continuing political power and influence of Big Tobacco: as the WHO puts it: the Tobacco industry is part of the problem, not of the solution. CTJ continue:

“At a minimum, policymakers should be asking whether it makes any sense to subsidize an industry producing products that kill thousands of Americans a year.”

And it’s not just Americans. It’s everyone.

Oh, and there’s this.


And this too.

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2 thoughts on “Should we be giving tax breaks to tobacco companies?

  1. Stefan says:

    I am afraid that the state is a kind of double-faced. On one hand it´s subsidising the tobacco-companies, on the other hand it gets lots of taxes from the consumers.
    It could be a good way if it´s possible to show the causality between thos products of manfacturers and the costs which are arising through these in a macro-oeconomic view, like health-care-costs for the society. This should be noted to the governements, not only, as you already mentioned, to America´s.

  2. Thevirginfuckingmary says:

    Well you should probably determine whether or not tobacco companies should exist in the first place. And work from there.

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