If Philip Morris Doesn’t Want Kids to Smoke, Why Is It Fighting Cigarette Tax Increases In Texas and North Carolina?

Statement of William V. Corr Executive Director, Campaign for Tobacco-Free Kids

Jul. 18 2005

Washington, DC — Philip Morris claims that it is a changed, responsible company that does not want kids to smoke and tries to help smokers quit. But Philip Morris’ actions tell a different story and show that the company continues to oppose proven measures to reduce smoking and save lives. In the latest example, Philip Morris is aggressively fighting efforts in Texas, North Carolina and other states to increase cigarette taxes despite admitting in its own internal documents that increasing the cigarette tax is one of the most effective ways to keep kids from smoking and encourage smokers to quit. Philip Morris is launching a radio ad campaign to defeat a $1 cigarette tax increase pending before the Texas Legislature, and it has been organizing retailers in opposition to a 35-cent cigarette tax increase in North Carolina. Philip Morris has also fought cigarette tax proposals in other states.

Philip Morris’ opposition to cigarette tax increases shows that the supposedly changed company is a wolf in sheep’s clothing. Philip Morris continues to protect its profits at the expense of public health. Policy makers in Texas, North Carolina and other states should reject Philip Morris’ misleading arguments and approve cigarette tax increases that will reduce smoking among both kids and adults and raise much-needed revenue. Only the tobacco industry’s bottom line will suffer.

Philip Morris’ opposition to cigarette tax increases exposes the company’s hypocrisy when it says it doesn’t want kids to smoke and wants to help smokers quit. Philip Morris has admitted repeatedly in its internal documents that increasing the cigarette tax is a highly effective way to reduce smoking. One Philip Morris document states, “When the tax goes up, industry loses volume and profits as many smokers cut back.” Another states, “It is clear that price has a pronounced effect on the smoking prevalence of teenagers, and that the goals of reducing teenage smoking and balancing the budget would both be served” by a cigarette tax increase. Other industry quotes on the impact of cigarette tax increases can be found at www.tobaccofreekids.org/research/factsheets/pdf/0146.pdf .

Philip Morris and other tobacco companies have grown increasingly desperate in their efforts to defeat cigarette tax increases because a growing number of states have increased their cigarette taxes in order to reduce smoking and raise revenue. Since January 1, 2002, 40 states, along with the District of Columbia and Puerto Rico, have increased cigarette taxes, thereby doubling the average state cigarette tax from 43.4 cents to 91.2 cents. These cigarette tax increases have contributed significantly to declines in both youth and adult smoking, while raising billions in new revenue for the states. States have acted because they know that studies show that every 10 percent increase in the price of cigarettes reduces youth smoking by seven percent and overall cigarette consumption by about four percent. They also know that every state that has significantly increased cigarette taxes in recent years has enjoyed substantial increases in revenue, even while reducing cigarette sales.

Texas and North Carolina are among the 10 states that have not increased cigarette taxes in recent years, but they are on the verge of doing so. Both the Texas House and Senate have passed cigarette taxes of at least $1 per pack. In North Carolina, which has the nation’s lowest cigarette tax at just five cents a pack, the Senate has passed a 35-cents a pack increase, while the House has passed a 25-cents a pack increase. Legislators in Texas and North Carolina should act to protect the interests of their kids and taxpayers, not the interests of Philip Morris. Texas legislators should pass a $1 per pack cigarette tax increase. North Carolina legislators should pass a cigarette tax increase of at least 35 cents a pack.

Philip Morris’ actions also show why it should not be taken credibly when it claims to be a changed, responsible company, as it has done in the federal government’s lawsuit against the tobacco companies. It is imperative that the government continue to aggressively pursue this lawsuit and seek the strongest possible remedies, including properly funded tobacco cessation and public education programs, stiff fines if the tobacco companies continue to addict children, restrictions on tobacco marketing, greater disclosure of internal industry documents, and strict monitoring of future industry behavior to keep its wrongdoing from continuing.

 

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