Higher taxes induce some smokers to quit and prevent others individuals from starting.
They also reduce the number of ex-users who return to tobacco and reduce consumption among continuing users. Children and adolescents are more responsive to price rises than older adults, so this intervention would have a significant impact on them. It is often believed that higher tax rates will reduce government revenues. In fact, the empirical evidence shows that raised tobacco taxes bring greater tobacco tax revenues. This is in part because the proportionate reduction in demand does not match the proportionate size of the tax increase, since addicted consumers respond relatively slowly to price rises.