R.J. Reynolds Fights 'Tax Profiling' of Smokers

New York City Mayor Michael Bloomberg on Wednesday proposed raising the cigarette tax from 8 cents to $1.50 a pack, on top of the state cigarette tax. His goal is to raise $250 million. According to the National Conference of State Legislatures, 44 states are facing a budget shortfall, and 19 of those are considering raising cigarette taxes - ranging from 10 to 61 cents per pack. R.J. Reynolds Tobacco Co. is opposing cigarette tax hikes in a number of states, decrying the "tax profiling" of adult smokers. The state and federal governments collect 15 times more from the sale of every pack of cigarettes than does R.J. Reynolds Tobacco Company, said Tommy Payne, executive vice president of external relations for R.J. Reynolds Tobacco Co., addressing a proposed 122-percent cigarette tax hike in Connecticut.

RJR also emphasized that, while federal and state governments collect more than $29 billion annually in tax and payments under the Master Settlement Agreement, according to the Centers for Disease Control only six states meet the minimum guidelines for spending on tobacco control. Furthermore, according to the U.S. General Accounting Office, 36 states spent zero or less than 10 percent of MSA funds on tobacco control. "The money is being spent on bridges, roads, deficit reduction, and more bureaucracy," RJR said.

Moderator Comment: Considering the demographic profile of adult tobacco consumers, is the government placing an unfair tax burden on this group of people?

It is the height of hypocrisy for states to take the tobacco companies to court and then fail to spend the dollars on tobacco control negotiated as part of the settlement. Nothing new for government to engage in 'do as I say not as I do' activity.

New York's new mayor may expect to raise an additional $250 million in revenues but what he has more likely accomplished is increasing sales of cigarettes (and the products purchased with them) in the suburbs. [George Anderson - Moderator]

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