The government should stop permitting tobacco companies to subtract ad

(B) Tobacco companies would not continue to advertise if they were forced to pay higher taxes.

This sounds nice, but we don't need this to be true for the conclusion to follow. If we negate this statement ("Tobacco companies WOULD continue to advertise"), it doesn't hurt the argument. In fact, the author's logic assumes that companies WILL keep advertising, and hence will have to increase prices.

(C) People would not continue to buy tobacco products if these products were no longer advertised.

This one doesn't matter, since there is no indication that advertising will end, nor any prediction of what would happen if it did.

(D) The money the government would gain as a result of the increase in tobacco companies’ taxable income would be used to educate the public about the dangers of tobacco use.

This also sounds very nice, but it isn't necessary to the argument. If we did NOT use the tax revenue for public health education, the author's prediction still might play out as described.

(E) The increase in taxes paid by tobacco companies would be equal to the additional income generated by raising prices.

We don't need the tobacco companies to keep their profit stable. As long as the companies raise their prices at all, the author's prediction is unharmed.