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How to beat big tobacco

Too good to wait for Thursday is Ernest Dumas' column on how Gov. Mike Beebe can beat the tobacco lobby and its mostly Republican legislative shills, the result being better health programs and less smoking.

Read on.

For sale cheap

The tobacco companies spent $66.7 million in California, $5.7 million in Missouri and $7.1 million in Oregon to defeat tobacco tax increases, exactly enough to do it each time, but Arkansas will be a bargain.
When it comes to taxes, Arkansas is a Wal-Mart special. You can purchase tax policy more cheaply in Arkansas than anywhere in the land.


All that R. J. Reynolds, Altria Group (formerly Philip Morris) and Lorillard Tobacco have to do is persuade as few as nine already highly amenable politicians to oppose the 56-cent-a-pack cigarette tax and it is stone dead. No emergency-medical system, no expanded health insurance for children, no wider community medical care, no improvements in a score of other health services.


Governor Beebe’s masterly orchestration of the legislature, where for two decades he was the concertmaster, will be put to the test on the tobacco taxes even though the leaders of both houses and the whole health establishment joined him on the tax drive. Beebe crafted a supermajority in both houses for a natural gas severance tax last year, an achievement that had escaped many strong governors before him, only because the gas companies practically begged to be taxed to head off a far larger tax increase that the voters would almost certainly have approved.


Beebe will not have that leverage over the cigarette companies because they know that for a million or so dollars they can defeat a ballot initiative in Arkansas as they’ve done in about half the state elections in recent years, all states with a smaller contingent of smokers than Arkansas.


The governor and the sponsors of the tax could adroitly shift the odds in its favor by changing the form of the tax, but they haven’t done it.


Shills for the tobacco industry landed in Arkansas last week — more will follow, probably including former House Republican Leader Dick Armey — and gave us the flavor of the campaign against the tax. R.J. Reynolds and the Philip Morris people grieve for all the poor people of Arkansas who will have to pay another 56 cents a pack or else kick a habit they’ve come to love. The tobacco executives are not concerned about lower profit margins when people give up the habit or children don’t take it up but rather about struggling families who will have to choose between food or medicine on the one hand and their smokes.


But that is only for public consumption. The real campaign has nothing to do with the sons and daughters of toil but with convincing a couple of dozen lawmakers, or fewer, who have never evinced the slightest concern for the poor and the awful choices that low-wage workers have to make.


The couple dozen legislators are not altogether or maybe not even predominantly Republican, but that is a handy cohort to target. Eight of the 35 state senators, one short of enough to kill the tax, are Republicans. Twenty-eight of the 100 representatives, two more than are needed to kill the bill in the House, are Republicans. You only need to stop it in one house or the other.  A perverse amendment to the Constitution in 1934 requires three-fourths of both houses to increase a tax that existed that year, which includes the cigarette excise tax, enacted in 1929. That took the power to set tax policy away from a majority and delivered it to a tiny minority.


(Not all Republicans are always wrong on this issue. Sen. John McCain, in his maverick phase, famously led a failed campaign 10 years ago to raise the federal tax by $1.10 a pack to drive people from tobacco.)


What they need to do is introduce a bill raising the sales tax on cigarettes from 3 percent to whatever level produces the $86 million needed for the trauma network and the other medical programs. That might be 20 or 25 percent, depending on whether the tax was collected on the wholesale, distributor or retail price. Arkansas had no sales tax in 1934 so it could be levied or increased by a simple majority of both houses — 18 senators and 51 representatives. The legislature enacted the first sales tax in 1935 when President Roosevelt threatened to cut off all relief programs to Arkansas if the state did not raise money to match federal relief to the vast numbers of unemployed as the other 47 states were doing and to pay schoolteachers.
That would make this a short fight because most legislators in both houses support the tax and the health programs. The tobacco shills could go home, the governor could husband his political capital for another cause, tens of thousands of Arkansas youngsters would not become slaves to tobacco, and a habit that places a mammoth burden on the public health-care system would finally begin to pay a modest share of its enormous cost to the state. That would be a bargain for everyone.

Comments

Here is a link to a video of highlights of yesterday's rally.

http://www.youtube.com/watch?v=YVz-UL4_kAo

The governor made special point to say he didn't want to demonize tobacco companies. Why the hell not I wonder?

HB1204 involves some concessions to the industry with an unfortunate weight based spit tax. This essentially makes nicotine and the major brands, that kids are more likely to try, relatively cheaper. Unfortunate or perhaps negotiable?

I went in to the rally as a tobacco free advocate but left recognizing the tremendous importance of passing this legislation. Free clinics, Inchman. 77% of traffic fatalities are on rural roads. A trauma system will save lives. This will benefit the whole state in many ways and not merely by the economic multiplier of reducing tobacco use. Enjoy the video.

Brilliant, as usual from Ernie Dumas. Any chance Ernie can help figure a way to repeal that "perverse amendment to the Constitution" passed in 1934?

If all Arkansans are to benefit from a trauma center, then all Arkansans should help to pay for it. People like Ernie Dumas who want the benefits of the trauma center without having to contribute towards the costs themselves are hypocrits. If anything Ernie should be advocating taxes on products that he consumes, so that he personally can contribute towards the building of a statewide trauma system. He should be proud to contribute towards the trauma system, rather than saddling some minority group with all of the costs.

Why is it that we can dedicate sales tax revenue to Game and Fish, but we cannot dedicate to a trauma system?

Disclosure - I am NOT a smoker, and I think smokers stink.

Severus, How do you feel about the subsidy you pay so tobacco companies can continue to profit in Arkansas?

How is it not a conflict of interest to raise money with a cigarette tax to discourage smoking, while at the same time still allowing smoking in over-21 establishments? If smoking decreases, however slowly, funding for whatever project will decrease eventually.

Most people who work in "over-21" smoking establishments don't have the choice of working somewhere else, especially in this economy. Musicians have almost no alternatives for working in healthy environment, save church, education or fine arts which do not pay a living wage (is that intentional?).

The message seems to be: people deserve to die from smoke for working in or patronizing an establishment that serves alcohol, assuming the alcohol doesn't kill them first.

Disclosure - I am a former smoker. I love music. When I go to a smoking establishment, it takes two days for my sinuses and lungs to recover. It would be nice if smokers would at least hold their cig in the hand furthest from my face.

Spot on, KF. We do not lose the right to breathe at 21. And that smoke is much more likely to kill you than the alcohol. Waitresses die from lung cancer at a higher rate than women in any other profession.

The tired old "reasons" to oppose the cig tax are pretty easy to knock down.

1) Raising the tax will encourage people to quit, thus leaving us with less revenue.

Ever since the 60's the major breeding programs in tobacco dealt not with increased yield or insect and disease resistance. No, tobacco has been bred to have increased amounts of nicotine, the addictive substance which has such a hold on its victims. Look at all the people dying in hospitals from tobacco related diseases. They're looking for a sympathetic nurse to wheel them outside to the smoking section. There's no way that the majority of tobacco addicts will quit. The tobacco companies have taken care of that.

Increased prices may, however, have some effect on keeping kids from starting a life-long addiction. And, if somehow the tax increase causes people to try and quit, then those individuals and society as a whole has won.

2) Increases in tobacco taxes hurts the poor disproportunately.

If this was true, then the benevolent tobacco companies would give the poor discounts so they could continue their march to an early grave. If someone is making the choice between a pack of cigs or a meal for the kids, 56 cents isn't going to weigh very heavily in this equasion.

3) Increases in tobacco taxes will encourage people to travel to other states or buy it on the black market.

How many people in Central Arkansas are going to spend the time and gas money to head to the borders to even buy several cartons of smokes? I doubt very many. I can imagine that some folks near the statelines may occasionally cross over for cheaper cigs, but the cost difference is going to have to be significant if anyone thinks this will impact revenue. As to the black market, it's going to be small time and limited at best.

4) Smoking is legal and should not be regulated by the government.

This is only the case because the tobacco companies have unlimited resources in which to manipulate the government to their wishes. It is amazing that people can still smoke in bars and some restaurants.

Before all of the smokers get angry at people who want to fund much needed programs with a new tax, I suggest that they point their anger at the companies which have manipulated nicotine levels, charged vast amounts for their products, and used this money to target kids to start this habit. Place your anger where it counts and you may get fed up with these companies.

The best reason for opposing the tobacco tax is that it has no connection with the need for a trauma system. Around 20% of Arkansans smoke. Why shouldn't the other 80% contribute to this worthwhile endeavor.

Zarathustra said: "Severus, How do you feel about the subsidy you pay so tobacco companies can continue to profit in Arkansas?"

Please explain these subsidies that you think tobacco companies are receiving. Tobacco companies sell a legal product that consumers are free to buy or to reject.

It is obvious from the comments on the blog and the letters to the DoG that the governor needs to do a far better job of explaining the differences between an emergency room and a trauma center.

For therecord, we don't have even one trauma center in this state. The nearest one is in Memphis which is great if your car or farm accident occurs in West Memphis but not so hot if it occurs in Mountain View or Harrison. A trauma center is not a regular emergency room where you see the doctor who either is on call or a current staff members who's speciality is emergency medicine. The specialist who might be needed is on call (maybe) or available in the next town or in Little Rock. In medical emergencies, there is a period they call the "golden hour". If you can't get the person stabilized and having corrective work underway in that first hour, the chances of survival go down.

In a state where we don't even require a motorcycle rider without a helmet to have filled out an organ donor card and wghich has more than its share of farm and highway accidents, requiring long periods to get to a hospital and then possible transfers to the "right" hospital, can and does cost lives.

We also need to amend the rules on where an injutred person can be taken by emergency workers. Not every hospital is equal and the one with the needed equipment may not be the closest one. The end result can be the need for a second, time-costing move.

The Illinois system had trauma centers with emergency helicopters spread throughout the state so everyone was within a specific distance measured in time. Think of a series of overlapping circles that cover the whole state and each hospital with all of the required medical specialities.

I like Ernie Dumas' idea. Then Gilbert Baker camn stand his ground and be as stubborn about never voting for a tax increase which isn't the sign of a great legislator but of a person who puts his needs above those of the state as a whole (but we of the 43% alreadfy knew that).

Fed Up to Here

i am a smoker, but here is my opinion, if you want to propose a tax on people that will possibly but not definetly cause a strain on our med system then you tax the fat folks. did u see the guy that brought the bill forward? this guy is the opitomy of high blood pressure, deabetes, heart disease, and just plain ulgy to look at. if you want to pass a so called sin tax or health tax, then we as a people have no other recourse but to pass a FAT tax. We should also consider a clean air tax, cause people may not like the smell of my somkey breath that is killing them, but i cannot smell the smell of your influenza or pneumonia or any other type of airbourne germs that you decide to come to work with.

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