These days in the U.S., it seems like the government has declared open war on tobacco companies. Recent national laws have forbidden tobacco billboards within 1,000 feet of schools, free gifts with tobacco purchases, and at the center of it all ... lawmakers have raised prospects of increased cigarette taxes, and a new tobacco settlement may soon be reached. The habit of smoking, for so long a minor indulgence and staple of European culture, is now being given criminal connotations normally reserved for drug dealers.
Cigarette taxes are nothing new; "vice taxes" have been used continually throughout American history to discourage unwanted behavior. The latest twist, however, is the proposal to use revenues from cigarette taxes to fund such "social goods" as health care and education. In New Hampshire, Governor Jeanne Shaheen has pushed for a 25-cent cigarette tax increase to fund statewide public kindergarten, something no other state lacks.
As a political move devised to both discourage smoking and encourage public education,it is an impressively shrewd one. If I were to protest against the cigarette tax, then suddenly I'd be "anti-kindergarten" as well; it'd be difficult to suggest another way of funding kindergarten, because I'd be accused of "siding with out-of-state tobacco interests rather than New Hampshire's five-year olds." I generally support such measures as clever and consistent ways to achieve social goals.
The target population of the taxes, in terms of altering behavior, is the teenage crowd. Teenagers are much more price-sensitive than adults, as well as less likely to be nicotine addicts, and hence comprise the only group which would significantly decrease consumption due to higher prices. The adults are still important for revenues however, since they tend to withstand heavy taxation without serious changes in consumption.
Nationally, a cigarette tax may not happen so easily; the tobacco lobby in Washington, D.C. is HUGE, and both parties are heavily funded by Phillip Morris (no relation to Dick), R. J. Reynolds and the other tobacco behemoths. Cigarette taxes probably won't be raised without a turmoil-filled, conflict-of-interest fight with the contributing companies and southern tobacco-states. It is not even to fund greater health care coverage, for health activist organizations don't quite have the political clout of "Big Tobacco." Plus, a bill for subsidizing transactions in the health-care industry (as riddled with inefficiency as it is) would for a long time be lost in the dense quagmires of filibuster/subcommittee-land.
As for the settlement, I must confess that when the $368.5 billion deal was announced a few weeks ago, I momentarily thought there would be some resolution to the situation. However, in light of the critiques of expert health panels and the Clinton Administration alike, there really do seem to be glaring problems with the agreed-upon settlement. Foremost is the issue of Food and Drug Administration tobacco regulation: under the deal, the FDA could only mandate decreased nicotine content in cigarettes if the FDA could first prove that the measure would not prompt the emergence of a cigarette black-market. This may at first sound reasonable, but in reality it'd be nearly impossible to procure conclusive evidence that there would be no such unintended economic consequences of the policy; the FDA would effectively be impotent, unless it could assemble a bunch of respected economists to support the position.
Also at issue in the deal is the question, "Who gets the money?" Apparently, a large portion of the annual payments by tobacco companies would be received by high-powered lawyers, which understandably bothers the health industry: shouldn't the litigants and patients receive more? The White House, despite being composed largely of former high-powered lawyers, is also critical of the division-of-payment provisions.
What I still can't fathom in all of this, though, is that many people claim the $368.5 billion to be "too soft" on the industry. Even given this mammoth penalty, the companies could supposedly "work around it," putting their creative marketing teams into overtime and expanding further to foreign markets. Really?! I don't doubt the possibility, it's more that I'm stunned by the existence of this industry which can actually HANDLE such a huge penalty, and not be crushed under the weight of so much bad publicity. What other industries, if any, could even survive such an onslaught, let alone turn it into favorable stock-market trends and maintain incredible profits?
Big Tobacco won't fall very quickly, or be vanquished even in the long run. But the recent spate of events has certainly produced a large "chink" in its armor, a hole which will be attacked and exploited several times in the future by proponents of social goods as well as average citizens concerned about Big Tobacco's unhealthy power in our country.
