The "Marlboro Man" Gets Stimulus Courtesy of Texas Legislature s

RJ Note: So the big tobacco producer wanted this tax? When will the lawsuits begin for deceptive practice this time?

Texas Legislature Passes Massive Smokeless and Other Tobacco Tax That Allows 'Marlboro Man' and 'Copenhagen Man' to Benefit

/PRNewswire/ -- The Texas Senate voted 29-2 to pass a $100 million tax increase on smokeless tobacco and other tobacco products. HB 2154, while being a laudable program to fund rural doctor programs and changes in the business franchise tax, relies on an enormous tax on smokeless and other tobacco products, such as pipe tobacco and roll-your-own tobacco to help fund the legislation. The Texas House voted on a similar measure by a vote of 79-61 after much contentious debate. This issue has been debated over the past three legislative sessions and is largely viewed as an internal tobacco industry fight between industry giant, Philip Morris (now Altria), and the smallest companies says National Tobacco, headquartered in Louisville, KY.

"It is unfortunate that the Texas Senate, with little debate and what appears to be little understanding of the real market, passed a large tax increase on the small companies that compete with the 'Marlboro(R) Man' and 'Copenhagen(R) Man,' not realizing such a tax hike will do little to sustain these programs going forward," says Ron Tully, Vice President of National Tobacco. "This new tax is a huge gift to the same tobacco company that was sued in the late 1990's by the State of Texas, and the same company that recently lost an Appeal in the US Department of Justice case, for deceptive trade practices."

This bill changes the methodology of how smokeless tobacco is taxed, from being a tax on the manufacturer's list price to being a tax based on the weight of tobacco in the final retail package. "Texas has been enjoying a rise in tax revenues from the current smokeless and other tobacco products tax, because the free market allowed companies to compete aggressively for adult customers. Texas has consistently brought in more tax revenue each year on these products, as almost all manufacturers, including Philip Morris, annually increase their prices on brands such as Copenhagen(R) and Skoal(R) to offset rising costs. As a result of these annual increases, the state gets an automatic revenue bump from the current list price tax. Even the Texas Comptroller of Public Accounts acknowledges that the revenue from smokeless tobacco based on the current list price method, would increase from $75,918,000 to $86,877,000 for the biennium 2010-2011. With the proposed weight-based tax method, Texas will experience less revenue in the future as tobacco sales decline," says Tully.

Tully added, "Philip Morris, which now has over a 50% share of the cigarette market and over a 50% share of the smokeless tobacco market, is pushing for this weight-based tax on almost all tobacco products, simply to take out the small competitors in the market and make its smokeless and smoking brands the dominant market players. Interestingly Philip Morris has managed to maintain an exemption from this new weight-based tax for its popular Black and Mild(R) cigar products. Texas will now have the unpopular distinction of being among only a few of the 50 states that have elected to switch to a punitive weight-based tax on many tobacco products."

"When doctors who have historically opposed smoking, stand with Philip Morris, you know it has got to be a bad deal for someone. If Philip Morris is supporting a tax on the tobacco industry, you also know it must be a good deal for them and the brands they sell. And it is," Tully says.

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Federal Cigarette Tax Increase and Current Economy Will Change Smoker's Habits

RJ Note: I don't smoke and am certainly not interested in it. Besides the obvious health risks, the overall stench on the clothes would be enough to deter me. If I did smoke, I would be in fumes over this tax. Seems like it's a way to be sure that a select group of people will be paying for this new improved government program. If the program and higher tax does provide smokers the incentive to smoke, what will the government have to tax next to pay for this program? Just wondering.

/PRNewswire/ -- On April 1, the federal cigarette tax will increase by 62 cents to a total of $1.01 per pack, to fund the expansion of the State Children's Health Insurance Program that was signed into law earlier this year.(1) A new survey shows that the April 1st federal price increase on cigarettes and the current economy are big concerns for smokers and will change their current smoking habits.(2)

The survey, commissioned by the marketers of Nicorette, showed 70 percent of smokers say that the current price of cigarettes is already very expensive and is one of their main concerns about smoking, second only to health concerns.(2) For survey respondents over 45 years old, the price of cigarettes was the most cited concern.(2) Further, 56 percent of smokers say the April 1st price increase will prompt them to smoke fewer cigarettes and 72 percent say the price increase on cigarettes would increase their intention to quit.(2)

Smokers also say the current economy is a big concern and it will prompt them to change their smoking habits.(2) Forty-seven percent of smokers say they would cut back on cigarettes because of the economy.(2)

"Research shows that smokers are more likely to try to quit when the price of cigarettes goes up," said Dr. Frank Chaloupka, professor of economics at the University of Illinois at Chicago and affiliate of the National Bureau of Economic Research. "Given the recent tax hike and the state of the economy, now would be a great time for smokers to re-evaluate how smoking affects their finances and calculate how much they could save by quitting. A typical pack-a-day smoker could be spending approximately $2,000 each year on cigarettes, but no matter how expensive it is to smoke, quitting smoking is a big challenge."

Almost half of smokers currently quitting, or more likely to quit smoking, noted in the survey that they do not plan to get help.(2) In fact, almost half (48 percent) said they would prefer to quit cold turkey or gradually cut down smoking without assistance.(2) Unfortunately, research shows only 3-5 percent of smokers who quit without the help of cessation tools are successful long-term.(3) The same research shows smokers are twice as likely to be successful if they use therapeutic nicotine rather than quitting unassisted.(3)

"Tools for cessation, such as therapeutic nicotine, social support and counseling have been proven to significantly increase a smoker's chances of quitting successfully," said Saul Shiffman, Ph.D., professor in the departments of psychology and pharmaceutical science at the University of Pittsburgh. "Therapeutic nicotine products, like Nicorette White Ice Mint gum, are a safe and effective approach to quitting, and can help a smoker manage cravings and withdrawal symptoms during the quitting process."

Smokers interested in quitting due to the federal tax increase can access free tools and resources at www.nicorette.com. Nicorette is giving away a free starter pack of Nicorette White Ice Mint gum while supplies last.

About the Survey
A national survey of 1,046 U.S. adult smokers was conducted in March

2009 by Richard Day Research through Global Market Insite, Inc. (2) The survey was balanced according to age, gender and regional dispersion of smokers found in the 2007 National Health interview Survey (NHIS) and the 2007 Behavioral Risk Factor Surveillance System survey, as reported by the U.S. Centers for Disease Control and Prevention.(2) The survey was conducted on behalf of Nicorette.

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