A Tobacco Deal: Really?

Posted By JMoser on 9 Jan 2015 – 11:59am in Biological Sciences, Public Health, Social Sciences, Economics, Politics, Sociology

It seems like the Tobacco Master Settlement Agreement of 1998 was a huge accomplishment. Finally, many were saying and thinking that we were going to put an end to tobacco. With $206 billion over the first 25 years paid to state governments it seemed like tobacco would go by the wayside.

Unfortunately, our position at Humans for a Healthier World is more critical. This deal saved tobacco from endangerment. I call the tobacco settlement an enabler, not a disabler. We enabled the tobacco companies to escape the one thing they fear most: a disappearance of tobacco from our culture.

In 1998, 46 states entered into an agreement to force the tobacco companies to pay a tax. Terrific? Here are the two major problems. First, the use of that money was never mandated. It was completely up to the states to use that money whichever way they wanted. And naturally, only 1.9 percent of that money has been used to help people quit or ever start smoking. That is a travesty and we have our representatives to blame for inking that deal. For example, Mr. Estes points out in a recent New York Times article that in one state, North Carolina, $42 million went to tobacco farmers for modernization of their equipment and marketing!

Mr. Estes further points out, secondly and even more problematically, that nine states, including California, have taken out bonds that rely on this tobacco money as payback and he is predicting that if tobacco smoking sees a decline, these states will default on these bonds. Either these states will be forced to pay back through other taxes -since there is no guarantee smokers will keep smoking- or they will have to orchestrate another deal with the tobacco companies to resolve this sticky default. Mr. Estes argues that states are putting themselves in the unenviable position of relying upon tobacco tax money to meet their shortcomings. States will need smokers to keep smoking! This will give tobacco companies even more power and will discourage states from using money now or well into the future for decreasing tobacco consumption. In other words, our governments are becoming addicts as well as the tobacco consumers.

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Biological Sciences, Public Health, Social Sciences, Economics, Politics, Sociology
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Tobacco Settlement

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