Tobacco Documents Online

I AMERICAN PSYCHOLOGICAL ASSOCIATION Date: November 18, 1993 Contact: Doug Fizel Public Affairs Office (202) 336-5700 AMERICAN PSYCHOLOGICAL ASSOCIATION SUPPORTS $2.00-PER-PACK INCREASE IN FEDERAL CIGARETTE TAX TO FUND HEALTH CARE REFORM California Researcher Testifies on APA's Behalf Before House Ways and Means Committee WASHINGTON -- A$2.00-per=pack federal excise tax on cigarettes would have two very important effects: it would raise a significant amount of revenue to fund health care reform and it would improve health. That was the testimony today of Robert M. Kaplan, Ph.D. on behalf of the American Psychological Association (APA) before the House Ways and Means Committee. Dr. Kaplan is professor and chief of the Division of Health Care Services, Department of Family and Preventive Medicine at the University of California at San Diego. He is also the co-principal investigator of the California Tobacco Survey, which has monitored the effects of an increase in that state's tax on cigarettes that went into effect in 1989. Noting that the relatively modest (25 cents per pack) tax increase in California has raised nearly $600 million per year since it was adopted, Dr. Kaplan estimated that a 75-cents-per-pack tax proposed by the Clinton administration would raise between $15 and $21 billion per year to help finance health care reform. A $2.00-per- pack would raise even more initially. OD ca ~ Concurrent with the increase in revenues, Dr. Kaplan said, there would be an W Public Affairs Office 750 First Street, NE Washington, DC 20002-4242 (202) 336-5700 (202) 336-5708 (FAX) (202) 336-6123 (TDD) - more -

© --2- improvement in the natiori s health status as more and more smokers quit rather than pay such a high tax. Using an economic model he developed, Dr. Kaplan estimated that "if there is a 20% increase in price, there would be approximately a 5% decrease in demand." Before the higher tobacco tax was adopted in California, Dr. Kaplan testified, the prevalence of smoking among people over 20 was declining by 0.70% per year. Since the introduction of the tax in 1989 "the rate of decline has accelerated to 1.27% per year." But Dr. Kaplan noted that there have been other changes in the smoking universe since 1989, such as the tobacco industry's introduction of lower-priced generic cigarettes, discounts on some brands, heavy advertising of one particular brand using a cartoon character that young people seem to find particularly appealing and the introduction of "single-cigarette marketing," which allows young people with little disposable income to purchase cigarettes one at a time. As a result, the dropping rates of smoking in California are more the result of established smokers quitting than of young people not starting. In fact, he said, their surveys indicate that young people's uptake of smoking in California has actually increased since the higher tax took effect. "I hate to give the tobacco industry credit for anything," Dr. Kaplan said, "but they've figured out exactly how to neutralize the effect we expected the tax increase in California to have on kids' smoking behavior." The only way to_ counteract that, he said, would be make the tax too high for tobacco industry to match through price discounts. Dr. Kaplan also recommended that whatever tax is imposed on cigarettes, a -- more -

y --3-- small portion of it, perhaps three cents per pack, be set aside to support "creative research on smoking cessation, health promotion and disease prevention." The American Psychological Association (APA), in Washington, DC, is the largest scientific and professional organization representing psychology in the United States and is the world's largest association of psychologists. APA's membership includes more than 118,000 researchers, educators, clinicians, consultants and students. Through its divisions in 49_subfields of psychology and affiliations with 57 state and Canadian provincial associations, APA works to advance psychology as a science, as a profession and as a means of promoting human welfare.