WILL SMOKERS PAY MORE OR QUIT?

Growing up in a working-class neighborhood of the Maryland suburbs just
outside Washington, Tymiko Jones succumbed to peer pressure and started
smoking when she was only 15. Now, seven years later, she smokes half a
pack a day of Newports when she is by herself, and as much as three packs
if she is out with friends.

Trained as a physical therapist but able to find only part-time work, she
spends nearly $1,000 a year on cigarettes - a substantial share of her
sub-$20,000 income. If Congress approves the anti-smoking legislation
pending in the Senate, her habit would drain at least another $500 from her
wallet.

Like Jones, most of America's smokers fall toward the bottom of the income
scale and can least afford the increase. But will the price increase
persuade Jones and others like her to quit, as Congress hopes?

`It keeps me calm'

"Even if the price goes up I'll keep on smoking," Jones said. "It keeps me
calm."

As Jones' answer illustrates, Congress may be disappointed if it thinks it
can turn many people off smoking by jacking up the price. Even sharply
higher prices probably cannot stop many heavily addicted smokers from
lighting up.

Quitting is by no means impossible, however; the federal Centers for
Disease Control and Prevention estimates that 44 million Americans have
done it. And even if the tax, instead of inducing millions more to quit,
merely reduced the number of cigarettes consumed by today's smokers, the
impact on public health would be positive.

"The health risk is related to the amount of intake . . . ," said Jack
Henningfield, a professor of behavioral science at Johns Hopkins Medical
School in Baltimore. "It's not an all-or-nothing issue."

And more important to Congress is the hope that higher prices would keep
future Tymiko Joneses from starting to smoke as teens. Research suggests
that price increases probably would keep many teenagers from developing an
addiction that is so hard to break.

The bill approved by the Senate Commerce Committee would lift the cost of
cigarettes by 65 cents a pack in the first year and $1.10 a pack within
five years. In states that already levy stiff taxes on tobacco, the price
easily could exceed $4 a pack for premium brands such as Marlboro.

This week, the Senate Finance Committee approved a proposal changing that
tax to $1.50 a pack. It will be offered on the Senate floor as an amendment
to a tobacco bill sponsored by Senate Commerce Committee Chairman John
McCain, R-Ariz. Debate on McCain's bill is set for Monday.

McCain and the White House reportedly have reached agreement to
significantly toughen parts of his bill when it reaches the floor. The
amendment would raise the cap on legal damages paid by the industry to $8
billion a year from $6.5 billion, strengthen penalties on companies if
youth smoking does not drop sufficiently and make it tougher for states to
opt out of federal secondhand-smoke requirements.

Although the legislation is aimed at stopping smokers before they start,
its financial burden would fall almost entirely on today's smokers.

Smokers below poverty line

Today's smokers, like Tymiko Jones, mostly populate the low end of the
income scale and many fall below the poverty line. Nearly half of federal
tobacco taxes are paid by people earning less than $30,000 a year.

"It is hard to imagine a more regressive tax hike, and in magnitude it
swamps any other tax proposed or enacted in recent memory," said J.D.
Foster, executive director and chief economist for the Tax Foundation, a
nonpartisan Washington organization that studies tax policy.

"Essentially, we're going to tax the 45 million Americans who were the
unfortunate kids who started smoking at age 14," said Donald Garner, a law
professor at Southern Illinois University.

Those 45 million Americans believe they have enough problems as it is.
Dave, a 33-year old carpenter and Marlboro smoker from rural Warrenton,
Va., said of the proposed cigarette price increase: "It stinks that they
are going after smokers. Every time the government wants some money, it's,
`Let's tax the gas, everybody drives; let's tax the smokers, a lot of
people smoke.' . . . They always go after the little people."

The Senate Commerce Committee has gone to great pains not to call its
proposed price increase a tax, much as it may look like one. Cigarette
manufacturers would be required to pay annual lump sums to the government
and pass along the cost to consumers.

Tax or not, economists find that higher prices would lead many adults to
reduce their daily cigarette consumption - and some to reduce it to zero.
Smokers typically say that if Congress voted a price increase of the
magnitude approved by the Senate Commerce Committee, they would smoke less.

Cost of quitting high

The cost of quitting can also be high. A seven-day starter kit for the
nicotine skin patch costs close to $30, and the follow-up kit for the next
two weeks costs $48.00. Nicotine gum costs just about as much.

Smoking rates are expected to continue to decline even without federal
legislation. The bottom line: The Congressional Budget Office says
cigarette consumption might fall between 23 percent and 45 percent over the
next 25 years, depending on how much Congress raised the price.

Most economists and health experts believe that children are more sensitive
to price than adults. Smoking by adolescents in Canada was cut in half
during the 1980s when the price of cigarettes doubled to more than $4 a
pack. When the increase was later rolled back, teen smoking rates turned
back up, although they have still not reached the levels that prevailed
before the price increase.

However, a recent study by Cornell University researchers found that price
has almost no effect on children who haven't been hooked by eighth grade.

Two-thirds of Americans try cigarettes at some point when they are young,
and 70 percent of those go on to to become smokers, according to the CDC.
Some experts say the most that can be expected of a sudden price increase
is a reduction in the numbers of children who become heavily addicted.

Checked-by: jwjohnson@netmagic.net (Joel W. Johnson)