Tobacco Companies Quietly Supporting Prop. A

Martha Throebeck on Saturday, November 2, 2002

from the law-of-unintended-consequences-strikes-again dept.

In public, the tobacco companies have been engaged in a low-key campaign against increasing taxes on cigarettes and tobacco products. But secretly Big Tobacco executives know that higher taxes will result in higher company profits and better opportunities for them to purchase additional luxury cars in the years ahead.

"It's simple, really," explained one anonymous industry analyst. "If taxes on a pack of cigarettes increase by 55 cents, then tobacco companies will quietly raise their prices by a total of 60 cents. They use the tax hike as a shield for increasing their profit margin."

Nationwide, tobacco taxes have risen at steadily increasing rates thanks to multi-million dollar political campaigns bankrolled by the so-called "Health Care Mafia" hoping to cash in on the additional funding for various "Save the Children!" programs. Even with these higher taxes and the national tobacco settlement, however, cigarette makers continue to rake in the dough. R. J. Reynolds, for example, posted yet another stellar quarter financially.

"A few years ago everybody thought the court settlement would bankrupt the evil tobacco companies. Yeah, right," said Philip Mepocketz, one of the lawyers who worked the settlement case for Missouri and ended up making the equivalent of $1.4 million per hour. "The events of the last few years represent a best case scenario for tobacco companies. Profits are up and yet the anti-smoking crowd has been somewhat pacified."

State governments have also viewed events in the last decade as a win-win situation. "We've been able to prop up our budgets from the huge windfall given to us by the millions of smokers who can't quit and have little choice but to keep forking over cash," explained one state treasurer who didn't want to be identified. "And of course we're going to spend all this moola on everything except anti-smoking programs... if people were to quit smoking at a higher rate than we predict, our entire budget will implode in a financial scandal that will make Enron look like a bastion of corporate ethics..."

Missouri officials, tobacco companies executives, and members of the Health Care Mafia are all desperately hoping that Proposition A will pass this Tuesday.

"It's a win-win-win situation," opined one Missouri political junkie who is always available for comment. He continued, "Missouri's budget problems will lessen once lawmakers discover loopholes to allow them to divert some of the tax money to their coffers. Tobacco companies will use the tax increase as a convenient excuse to fatten their profit margins. And the health care industry will have all kinds of money it can spend on anything except anti-smoking programs. The only losers are smokers and the family members of smokers who will have to do without. But it's become fashionable to discriminate against them, so who cares?"