Smoking Is Another Tax Target
As health care and insurance costs spiral, `sin tax' on cigarettes may become reality
NO matter who is elected president, the tobacco industry expects more excise taxes on cigarettes.Skip to next paragraph
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The industry, which has aggressively fought higher taxes in the past, now believes the nation's pressing health care and insurance problems will force Congress to consider some form of sin taxes.
"We expect to be one of the revenue targets since deficit reduction and funding for some sort of national health insurance or health-care reform are going to be high up in the priorities in any new administration," says Walker Merryman, vice president for public affairs at the Tobacco Institute, the chief lobbying arm of the tobacco industry.
So far both candidates have avoided making any public commitments on tobacco taxes. President Bush has pledged no new taxes, and Arkansas Gov. Bill Clinton does not include new cigarette taxes in his list of new revenue sources.
However, privately, a key Clinton adviser admits tobacco appears to be a likely source of new revenue. Previous tax raises
Both Mr. Bush and Mr. Clinton have previously raised revenues from tobacco users. An increase in the federal excise tax on cigarettes is scheduled to go into effect January 1 when the tax rises from 20 cents a pack to 24 cents a pack.
This was part of the 1990 Bush budget agreement which initially hiked the excise-tax rise from 16 cents to 20 cents per pack.
In Arkansas, Clinton has signed into law two excise-tax increases: a one-cent-per-pack increase in 1991 and a three-and-a-quarter-cent increase in 1983.
However, he has had no comment on a pro-health proposal that would add 25 cents per pack to the price.
The proposal was on the ballot in Arkansas, but was removed after a successful challenge by the tobacco industry. The money was intended to help finance a funding gap in the state Medicaid program.
Now, its promoters intend to try to get the state legislature to pass it. With the Arkansas proposal off the ballot, the only other state initiative is a proposal in Massachusetts to increase the state tax to 51 cents per pack, which would be the highest in the nation.
Although Bush signed into law the increase in the cigarette excise tax, pro-health organizations have had a difficult time convincing the White House to raise tobacco taxes.
"We're hopeful that Clinton is going to be a real improvement over the current administration, which has been abysmal on this issue," says Scott Ballin, vice president for administration at the American Heart Association.
As governor, Clinton made it illegal to place vending machines in public places that are accessible to young people under the age of 18, and prohibited the distribution of free cigarettes to any person under that age.
He has also required all state agencies to have a smoking policy for their office space and has opposed smokers' rights legislation.
The Advocacy Institute, a public-interest lobbying group, notes that the tobacco industry is present in both campaigns. A key Bush adviser is Craig Fuller, vice chairman of Philip Morris. Election ties
The tobacco industry has ties to the Clinton campaign through Mickey Kantor, Clinton's campaign manager who was hired by the tobacco industry to oppose an ordinance making all Beverly Hills, Calif., restaurants smoke-free.
Mr. Kantor's law firm, Manatt, Phelps, Phillips & Kantor, represents Philip Morris in Washington.
Other Clinton advisers are Scott Pastrick, a lobbyist with Black, Manafort, Stone & Kelly, which lobbies for the Tobacco Institute and Thomas Hoog, vice chairman of Hill and Knowlton, who also does some tobacco work.
Then, there is Sen. Al Gore, the candidate for vice president. Senator Gore, a committed environmentalist, also represents a tobacco-growing state.
The senator was active in promoting health labeling on cigarette packages. And, his family quit growing tobacco after the death of a family member from smoking.
However, Gore has also tried to represent his constituents - tobacco farmers.