7.9 A regressive tax?

Increases in tobacco taxes are sometimes described (especially by the tobacco industry) as being 'regressive', in that their effect is most strongly felt among the poorer groups in the community. Since it is precisely the poorer, less educated and younger population sub-groups which provide a large proportion of the tobacco industry's market, it could equally be argued that the tobacco industry is regressive.(53)

The most price sensitive sections of the population, which include children and teenagers, are the most responsive to price increases in tobacco. Since presumably no-one would argue that it is inappropriate to price tobacco beyond the pockets of children, the issue of regression relates to impact on lower socioeconomic, adult sections of the community. British research has shown that men and women in lower socioeconomic groups are more likely to reduce their cigarette consumption because of price increases, than in response to health publicity about tobacco.(29)

There is no denying that tax increases are most felt among poorer subgroups. This is what makes them an effective preventive tool. Against this are a number of important considerations.