California Gets Heavily Lobbied over $2-A-Pack Tax Increase

Ashtray full of cigarette stubs

The tobacco industry has just ramped up its efforts against a proposed tax increase of $2.87 per cigarette pack. A report shows that Big Tobacco has so far burned $35.6 million in the anti-tax campaign.

This means that cigarette companies have outspent their rivals 2-to-1, just to prevent the new levy. It is the third time in a decade, California sees such fight. The new law would boost taxes on packs starting April 2017.

The new law would boost taxes on packs starting April 2017. But before that, Californians need to decide whether the tax will pass on Nov. 8, 2016.

Lawmakers said that the move would bring in up to $1.4 billion by 2018, with most of the cash being redirected to cancer research and smoking cessation programs.

Political analysts noted that when an industry pours so much money into a cause it is very hard for the public to make a clear decision. One expert compared the industry’s message with an ad on a giant movie screen and the health group’s claim with an ad on a small cell phone’s screen.

The Golden State, which is the most populous U.S. state, was the first to ban smoking in restaurants and bars. Big tobacco has a huge stake in California because historically other states often copy its decisions. If it manages to stymie the tax increase in a state with nearly 40 million residents, the industry hopes to discourage health-concerned groups in smaller states from campaigning for similar tax increases.

California’ Lobbyists

According to a recent report, Reynolds and Altria are among the biggest spenders in the Californian anti-tax fight.

Experts explained that the industry now employs an army of lobbyists to get things done in the state’s legislature. Lobbyists grew in significance after studies showed the health risk of tobacco smoking.

The industry usually uses lobbyists in battles over curbing the habit or marketing tobacco to minors on both state and federal levels. In the late 1990s, the companies agreed to give 46 states $200 billion to cover for medical costs of sick smokers.

But the industry faces other challenges. For instance, smoking has been on a declining trend for years in the U.S. And it is now all the harder to convince people to take up smoking when they have the versatile e-cigarettes.

California recently passed a law that imposes on e-cigs the same taxes as on traditional tobacco products. Other states such as Louisiana, North Carolina, and Kansas imposed levies on them.

What’s more, the e-cigarette industry fights to bar the U.S. Food and Drug Administration from regulating its products.

Industry on the New Levy: A ‘Special-Interest Tax Grab’

According to a California official, tobacco industry poured $35.6 million in the latest campaign. By contrast, proponents of the initiative spent just $17.2 million. So far, the industry has spent more than $140 million against three tax-increase proposals just in California.

Tobacco industry recently said that the tax hike is a “special-interest tax grab.” The companies added that any business “targeted for a tax” would spend heavily to prevent it happen.

Anti-tobacco advocates, however, said that these companies spend so much money to “deceive the public.” Activists believe the new tax would literally “save lives” and generate important savings in healthcare costs.

Image Source: Pixabay