Big Tobacco Fight an Increase on Cigarette Taxes

Published on March 10th, 2016 00:00

A civil war in the tobacco industry could conclude in Missouri this year. A set of rival ballot actions look for a boost in state’s lowest in the nation 17 cents per package tax on cigarettes. One would inquire voters to modify the state’s composition in order to increase the tax 60 cents per package and utilize the new money to pay for early childhood education. The parent company of R.J. Reynolds Tobacco, manufacturers of Camel and Newport cigarettes, lately provided $1 million in support of the action.


The other would request voters to boost the tobacco tax by 23 cents per package and set the money toward road repairs. That system is being managed by the Missouri Petroleum Markets and Convenience Store Association, a longtime rival of preceding initiatives to increase the cigarette tax, and is being typically financed by smaller, value-brand cigarette organizations such as Cheyenne International LLC and Xcaliber International Ltd.
Both campaigns are seeking the 2016 ballot. In addition, the fight between Big Tobacco and Little Tobacco could be a determining factor.

The major issue attracting the two forces into the discussion is the fact that for over a decade Missouri lawmakers have rejected the state attorney general’s demand to pass a law to nullify a pricing benefit that small tobacco manufacturers take pleasure in.

Big tobacco companies such as R.J. Reynolds and Philip Morris were involved in a 1998 legal settlement that pressured them to make yearly payments to Missouri in order to deal with the health issues their products had on smokers. Smaller tobacco businesses were not involved in that settlement. One more key distinction in the two recommendations is a provision in the road financing strategy voiding the tax boost if any upcoming tobacco tax boost is set on a state or local ballot. That indicates if a tax boost only shows up on a local ballot, even if it never moves, the 23 cents per package boost would fade away.

Irrespective of the details of the recommendations, a tobacco tax raise deals with an uphill battle in Missouri. Ballot initiatives to increase the tax in Missouri could not defeat in 2002, 2006 and 2012. However, the last campaign lost by below a percentage point. A third offer to increase the tobacco tax to finance higher education was left behind in the wake of the resignations of major representatives at the University of Missouri.