Tags: tax | cigarette | california

Small Govt Backers, Tobacco Firms Fight Calif. Cigarette Tax

Thursday, 26 Apr 2012 11:36 AM

By Robert Engler

Small government advocates and big tobacco companies have joined forces in California in an effort to defeat a ballot initiative that would more than double the state’s cigarette tax.

Supporters of Proposition 29 to boost the tax from 87 cents per pack to $1.87 say it would generate $735 million annually to support cancer research, according to the San Jose Mercury News.
But the newspaper reported Wednesday the Philip Morris and R.J. Reynolds tobacco companies are quietly spending millions to defeat Prop. 29, which could cost them $1 billion in annual sales.
A limited government coalition called California Against Out of Control Taxes and Spending is siding with the companies as the June referendum approaches.
“Everybody wants to say the evil tobacco companies are behind this. But there are important policy issues that have to be discussed, and it’s not surprising that taxpayer groups are out front talking about this,” said Joel Fox, president of the Small Business Action Committee, a coalition member.
The coalition has launched an advertising campaign criticizing a provision in the initiative that could send revenue generated by the tax to out-of-state cancer research organizations. The broadcast ad warns that Prop. 29 would create “a huge new research bureaucracy with no accountability run by political appointees who can spend our tax dollars out of state.”
So far, tobacco companies, which spent $66 million to defeat another cigarette tax referendum in 2006, have poured $21 million into this tax battle. But a survey conducted in early March by the Public Policy Institute of California found that 67 percent of likely voters support a tax increase on cigarettes.

Stanton Glantz, a professor of medicine at the University of California San Francisco and author of “Tobacco War: Inside the California Battles,” told the Mercury News the tobacco companies could still spend up to $100 million to turn public opinion against the measure.

“That’s one-tenth of what they’ll lose every year,” he said. “These companies will do everything humanly possible to kill this. They might lose because the public rejects them, but they’re not going to lose this because they were cheap.”

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