Do Smokers Cost Society Money?

The idea that they do is often used to justify higher taxes on tobacco. On balance, however, society makes a profit off of smokers:

The Centers for Disease Control and Prevention (CDC) [estimates] that smokers cost the country $96 billion a year in direct health care costs, and an additional $97 billion a year in lost productivity….. However, smokers die some 10 years earlier than nonsmokers, according to the CDC, and those premature deaths provide a savings to Medicare, Social Security, private pensions and other programs.

Vanderbilt University economist Kip Viscusi studied the net costs of smoking-related spending and savings and found that for every pack of cigarettes smoked, the country reaps a net cost savings of 32 cents.

A Dutch study published last year in the Public Library of Science Medicine journal said that health care costs for smokers were about $326,000 from age 20 on, compared to about $417,000 for thin and healthy people.

Comments (3)

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  1. Bruce says:

    Clearly, smokers are paying their own way. Therefore, additional taxes on tobacco are not justified by the argument that there are externalities.

    These taxes are being imposed because the poor are the easiest people to tax. They put up the least resistance.

  2. Chris says:

    It isn’t as if they are even pretending that tobacco taxes fund healthcare for smokers, they don’t.

    The recent tax increase was to fund “child” healthcare for people up to age 25 who are “poor” aka 4x the federal poverty level. Which is what? a 24 year old making 36 grand a year qualifies?

  3. Richard Walker says:

    Taxing smokers disproportionately taxes the poor:

    One-third of lower-income adults smoke versus one-fifth of middle- and high-income earners, according to the Centers for Disease Control and Prevention.

    Read more on Taxing the Poor from NCPA research: