Smoking or Non? You’ll Pay, Regardless

arlier this week, Australia’s high court upheld the landmark antismoking law passed in the country last year.

The law forbids any brand packaging or trademarks on cigarettes and replaces them with olive green packets that feature graphic health warnings and grizzly images of cancer-riddled mouths, blinded eyeballs and sick children. The point of all this is to reduce the rate of smoking in the country where, as of 2007’s figures, the rate was 19 percent, on par with the U.S. rate of 20 percent.

The goal of the law is to make it pointless for tobacco companies to advertise. The thinking goes, if you can’t see the logo, you won’t care what brand you buy. If you don’t care what brand you buy, tobacco companies have no reason to advertise.

Given that tobacco companies have a history of banding together-in 1954 they formed the Tobacco Industry Research Committee to fight that vicious little rumor that cigarettes caused lung cancer together-there’s no doubt they will be in cahoots again to foil the doomsayers. But the law is sure to have an effect.

More than just public health, fighting cigarette addiction has been something of a fiscal prerogative for governments.


Since funding from the Master Settlement Agreement-originally a 25-year deal signed in 1998 for $365 billion paid from the tobacco companies to states that got watered down to $205 billion-has not been enough to remedy the costs of smoking, countries have been a in a mad dash to further decrease smoking rates.

The costs of smoking don’t just affect just the smoker. Here, in the U.S., total public and private health care expenditures caused by smoking are $96 billion a year. In Medicaid payments, federal and state governments are spending $30.9 billion (federal share: $17.6 billion per year; states’ share: $13.3 billion).

There’s also $27.4 billion in smoking-caused Medicare expenditures each year and other expenditures, like VA health care, that add an additional $9.6 billion each year. Not to mention the $4.98 billion the government spends on secondhand smoking exposure.

The $205 billion from the MSA has barely sniffed at these costs. To add it all up, taxpayers yearly federal and state tax burden from smoking-caused government spending is $70.7 billion or $616 per household. Your tax dollars at work, ladies and gentlemen.

But don’t expect to see anything like the Australian law passed here. The smoking lobby is too strong and after the fight the tobacco companies put up against the MSA in the ‘90s, no one wants to take them on again.

A few states like California, New York and Massachusetts may attempt something similar, but the chances of a federal law getting passed are slim to none.

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