2009-03-18 18:05:10 - The bonuses to AIG executive which have outraged the country are less than 1/1000 of the cost of subsidies nonsmoking taxpayers are forced to pay each year for the costs smokers impose on the American economy - most of which nonsmokers are forced to pay in higher taxes and inflated health insurance premiums, U.S. Senators were reminded today by Action on Smoking and Health (ASH), a national antismoking and nonsmokers' rights organization.

America's first antismoking organization today reminded Senators that smoking costs Americans about $300 BILLION compared to the $165 million in AIG bonuses, and that these costs are imposed annually.

While AIG executives can at least claim that they did not know their actions would cause huge losses to the U.S. economy, smokers are well aware of the physical harm and economic impact of their smoking.

A simple remedy is to require smokers to pay more for their health insurance -- whether under existing plans including Medicare and Medicaid, or under whatever programs result from overall health care reform -- or to tax their health benefits, not those of innocent nonsmoking Americans.

ASH argues that taxing the health benefits of smokers, or simply requiring

them to pay more than nonsmokers for health insurance, is fairer than taxing the health benefits of ordinary taxpayers because, under the current system, the great majority of Americans who wisely choose not to smoke are forced to bear most of these costs of those who do. Moreover, taxing the health benefits of most families will do nothing to lower the actual costs of health care, or otherwise save money for taxpayers.

On the contrary, taxing the health benefits of smokers, or simply charging them more for health insurance, can not only raise the same amount of revenue, but also provide a powerful stimulus and incentive to help the great majority of smokers who already want to quit to finally do so and save the country hundreds of billions of dollars in unnecessary expenses - far more than cost saving from improving procedures, eliminating 'waste,' etc. from our health care system.

'Paying $165 million in bonuses to AIG executives who helped cause the financial crisis is outrageous, but they may not have known what they are doing, and paying the bonuses may help keep them on the job and ultimately save taxpayers money. But continuing to subsidize smokers more than 1000 times that amount, year after year, when the smokers know what they are causing, and when reducing smokers' subsidies could slash hundreds of billions in health care costs each year is even more outrageous,' says ASH.

BELOW IS THE MESSAGE FAXED TO MEMBERS OF THE U.S. SENATE

SENATORS: Taxpayers Shouldn't be Forced to Subsidize AIG Execs OR Smokers' Health Insurance
Smokers' Cost to Taxpayers in 1000 Times Higher, Both are Direct Causes of Unfair Subsidy

The country appears to be unanimous in its outrage about taxpayer money being used to pay about $165 million in bonuses to AIG executives. But the Congress should be even more outraged over taxpayer subsidies, which are about 1,000 times higher, being paid to cover the costs of the small percentage of Americans who persist in smoking -- a much larger problem, and one which can easily be remedied.

Although fewer than 20% of adult Americans still smoke, the CDC conservatively estimates that their smoking costs the American economy $193 BILLION annually, most of which is paid by nonsmokers in the form of higher taxes (for excess payments under Medicare, Medicaid, and other programs), as well as in grossly inflated health insurance premiums paid by both individuals and corporations.

Moreover, many believe that the $193 BILLION estimate is far too small, since it consists largely of the costs for the major diseases smoking causes. The estimate does not include the much larger number of diseases and conditions which smoking exacerbates, and therefore increases the health care costs for, nor does it include the health care costs smoking imposes on nonsmokers, including children. For example, secondhand smoke costs North Carolina's taxpayers about $289 million a year - more than AIG bonuses.

Many argue that it's outrageous to subsidize AIG executives because they allegedly caused the economic crisis. But it is equally outrageous to continue to subsidize the millions of smokers who cause these excess health care and other costs year after year. At least the AIG executives can claim they didn't know what harm they are causing. Smokers clearly do know what harm they are causing both to themselves and to the American economy, so in many ways they may be even less deserving of taxpayer subsidies.

A simple remedy is to require smokers to pay more for their health insurance -- whether under existing plans including Medicare and Medicaid, or under whatever
programs result from overall health care reform -- or to tax their health benefits, not those of innocent nonsmoking Americans.

Taxing the health benefits of smokers, or simply requiring them to pay more than nonsmokers for health insurance, is fairer than taxing the health benefits of ordinary taxpayers because, under the current system, the great majority of Americans who wisely choose not to smoke are forced to bear most of these costs of those who do. Moreover, taxing the health benefits of most families will do nothing to lower the actual costs of health care or otherwise save money for taxpayers.

On the contrary, taxing the health benefits of smokers, or simply charging them more for health insurance, can not only raise the same amount of revenue, but also provide a powerful stimulus and incentive to help the great majority of smokers who already want to quit to finally do so and save the country hundreds of billions of dollars in unnecessary expenses - far more than cost saving from improving procedures, eliminating 'waste,' etc. from our health care system.

It would be a perversion for the Congress to tax health benefits to help pay for overhauling the health care system, as some spokesmen have suggested, if they do not truly overhaul the health care system by reducing the major preventable cause of health care costs.

PROFESSOR JOHN F. BANZHAF III
Executive Director and Chief Counsel
Action on Smoking and Health (ASH)
2013 H Street, NW
Washington, DC 20006, USA
(202) 659-4310 // ash.org