Taxes that raise the price of tobacco products in the United States and other countries are an effective way to reduce tobacco use and prevent young people from becoming smokers. Tobacco taxes that raise prices by 10% have been shown to reduce overall use among adults by about 4%. That’s because as price increases, many current tobacco users quit and others who don’t quit actually end up consuming less tobacco. It’s estimated that price and tax increases have an even bigger impact on youth and lower-income populations. Not only do higher taxes and prices help reduce tobacco use, they also generate significant new revenues because—despite the drop in use after price and tax increase—the overall demand for tobacco products remains high.
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