Friday, February 19, 2010

What's More Regressive - Tobacco or Tobacco Taxes?

Whenever an increase in tobacco taxes is debated, opponents inevitably declare the taxes regressive and say such taxes take money from people who can least afford to lose it and in the process takes food of that families table.

A new study turns that argument on its head. Stephen Block and Patrick Webb, professors at Tufts University, have linked tobacco use in developing countries to malnutrition in children. They found it decreases the proportion of income spent on food. The pair published their findings in October’s edition of the journal Economic Development and Cultural Change.

For example, in Indonesia, where 18 percent of the population lives below the poverty line, the smoking rate is approximately 3 percent for women and 60 percent for men. The World Bank estimates that tobacco is the nation’s second-biggest business and the second-largest expenditure among the country’s poor.


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