Less than 1% of Revenue Generated from Tobacco Taxes in the U.S. are spent on Tobacco Control Programs

In 2018, revenues from tobacco tax amounted to a whopping $12.86 billion. However, less than one percent (0.38 %) of this amount was allocated for the various tobacco control programs run by the government. 

 


 


 

 

It is estimated that smoking costs the United States over $170 billion in lost productivity, and at least $133 billion in direct medical care expenditures each year. The Centres for Disease Control and Prevention (CDC), the leading national public health institute of the country, has been proactive in its efforts to curb tobacco consumption through the initiation and funding of various state-level tobacco control programs. 

In 2014, CDC released an evidence-based guide, the Best Practices for Comprehensive Tobacco Control Practices, which recommends an investment of $3,306.3 million towards the funding of these programs. However, less than 72 million (2 percent of the recommended amount) was allocated for the implementation of comprehensive tobacco control programs in 2019. Further, many states experienced severe cuts to state and local tobacco control funding. Their studies reveal that the States that made substantial investments in tobacco prevention and control have seen larger declines in cigarette sales.

Apart from the tax revenues, the government also receives billions of dollars in fines as part of the Tobacco Master Settlement Agreement, the largest civil litigation settlement in U.S. history. In 1998, the nation’s four largest tobacco companies and attorney generals from 46 states and territories reached a settlement wherein the companies were required to pay $206 billion over the first 25 years along with indefinite payments into the future. These funds were meant to compensate the states for the medical costs of caring for persons with smoking-related illnesses as well as fund cancer research and tobacco prevention and cessation programs.

 At present more than 50 tobacco companies are a party to the settlement and have cumulatively paid more than $100 billion to the state governments. According to a report by the Campaign for Tobacco-Free Kids, a non-profit organisation that advocates the reduction of tobacco use, out of the $27.3 billion that the states will collect in revenue as part of the tobacco settlement and taxes in FY 2019, only 2.4 percent  – $655 million – will be spent on prevention and cessation programs. But legal experts point out that, due to the lack of proper directives regarding the allocation of funds received as part of the settlement, the states cannot be held accountable for the shortchange.