Oregon: Historic tax hike to fight smoking

In a referendum, Oregonians approved a proposal to increase taxes on tobacco and nicotine products. This measure comes after nearly two decades of inaction on the issue: Oregon was among the lowest-ranked states in the country.[1].

With over 66% voters responding positively to the proposed tax measure, Oregon will see its tobacco tax levels increase significantly, from $1.33 to $3.33 per pack of twenty cigarettes. Called " measure 108 ", this new decision does not spare other products either, since it also allows a tax of 65% on electronic cigarettes. It also provides for an increase in the tax burden on cigars, which can be taxed up to 1 dollar per unit.

New and pre-allocated tax resources

According to advocates of this measure, the approval of these new taxes signals a growing awareness among Oregonians that health issues take priority over smoking. Measure 108 is estimated to generate approximately $160 million annually for the state of Oregon. These new resources will also be allocated to 90% at the Oregon Health Authority to fund treatment for patients, particularly those with mental health conditions. The remaining 10% will be allocated to healthcare providers and specific anti-smoking programs.

The industry's arguments

To reject the proposal, pro-tobacco advocacy groups have put forward the argument that these tax increases would primarily affect the state's most disadvantaged populations. While this argument is a recurring one from the tobacco industry, it remains flawed. People in precarious situations are the primary beneficiaries of tax increases. Indeed, they are more sensitive to the price argument and are more likely to quit smoking following tax increases. Finally, advocacy groups have pointed out that a tax increase could weaken small, local businesses. These arguments are not actually supported by any tangible evidence. Tax increases are accompanied by more economic benefits than adverse effects.[2].

[2] Smith KE, Savell E, Gilmore AB. What is known about tobacco industry efforts to influence tobacco tax? A systematic review of empirical studies. Tob Control. 2013;22(2):144-153. doi:10.1136/tobaccocontrol-2011-050098