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RJ Reynolds Can’t Make Up Its Mind

In California, RJ Reynolds is spending millions to prevent a new tax on cigarettes. But in Missouri, RJ Reynolds is spending millions to promote a new tax on cigarettes. Tobacco taxes are proven to prevent kids from smoking and to increase the number of adults who quit. Big Tobacco has spent lots of money over the years trying to defeat new taxes, so why are they flip-flopping in Missouri? rj-reynolds

Missouri

In Missouri, RJ Reynolds is supporting a tax increase on tobacco. Missouri currently has the lowest state tax in the country on cigarettes; just $.17. RJ Reynolds is spending almost $3 million to support the Missouri increase- which would result in an increase of just $.15 a year for four years. Even after the four year increase occurs, the tax would be $.77, putting Missouri in 39th place for US tobacco state taxes. This increase is so small that unfortunately it won’t do much to curb smoking- which is exactly why Reynolds American is supporting it and jumping at the chance to appear in favor of public health measures.

There is another reason why RJ Reynolds is supporting the proposal. In Missouri, off-brand cigarette companies, which offer cheaper products than RJ Reynolds, have about 25% of the market share. The proposition calls for a $.67 “equity fee” for those companies, on top of the state-wide $.60 increase. This proposal costs RJ Reynolds’ competition more than double what it will cost them and may run some of their competitors out of business, while RJ Reynolds isn’t likely to lose many customers. Even more importantly, Big Tobacco likely thinks that a small tax increase now forestalls a bigger one later. This small gesture now could prevent a large, effective increase later. But what’s happening elsewhere in the country?

California

Big Tobacco has spent over $55 million to defeat Proposition 56, an initiative that would raise the state cigarette tax by $2 a pack. California’s current tax is $.87, but this increase would make the statewide tax $2.87, moving California’s tax into the top 10 highest state cigarette taxes, but still far from worldwide highs of cigarette pack prices, such as in Australia ($16 a pack), Norway ($12.59), and Singapore ($9.32).

Big Tobacco justifies the difference in strategies between states by implying that this proposition will take money away from schools and give it to insurance companies. While this isn’t true, unfortunately support for the tax increase has dropped since RJ Reynolds and Philip Morris started issuing ads to support their message. Public health advocates are fighting hard to counter these misconceptions, but they are being dramatically outspent by Big Tobacco.

Around the country

Tobacco tax increases are also on the table in Colorado (an increase of $1.75 a pack) and North Dakota (an increase of $1.76 a pack). Big Tobacco is pumping money into those states to defeat those measures as well; only the business opportunity in Missouri has won their suspicious stamp of approval

Not surprisingly, Big Tobacco has not truly changed their tune when it comes to tobacco taxes. Despite the fact that these taxes are proven to prevent smoking initiation, increase cessation, and therefore save lives, Big Tobacco is only interested in supporting taxes when there is profit waiting for them. Hopefully, despite the extraordinary measures taken by Big Tobacco, effective tax increases will pass this November and therefore protect Americans from deadly tobacco products.

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