The tobacco companies spent $66.7 million in California, $5.7 million in Missouri and $7.1 million in Oregon to defeat tobacco tax increases, exactly enough to do it each time, but Arkansas will be a bargain.
When it comes to taxes, Arkansas is a Wal-Mart special. You can purchase tax policy more cheaply in Arkansas than anywhere in the land.
All that R. J. Reynolds, Altria Group (formerly Philip Morris) and Lorillard Tobacco have to do is persuade as few as nine already highly amenable politicians to oppose the 56-cent-a-pack cigarette tax and it is stone dead. No emergency-medical system, no expanded health insurance for children, no wider community medical care, no improvements in a score of other health services.
Governor Beebe’s masterly orchestration of the legislature, where for two decades he was the concertmaster, will be put to the test on the tobacco taxes even though the leaders of both houses and the whole health establishment joined him on the tax drive. Beebe crafted a supermajority in both houses for a natural gas severance tax last year, an achievement that had escaped many strong governors before him, only because the gas companies practically begged to be taxed to head off a far larger tax increase that the voters would almost certainly have approved.
Beebe will not have that leverage over the cigarette companies because they know that for a million or so dollars they can defeat a ballot initiative in Arkansas as they’ve done in about half the state elections in recent years, all states with a smaller contingent of smokers than Arkansas.
The governor and the sponsors of the tax could adroitly shift the odds in its favor by changing the form of the tax, but they haven’t done it.
Shills for the tobacco industry landed in Arkansas last week — more will follow, probably including former House Republican Leader Dick Armey — and gave us the flavor of the campaign against the tax. R.J. Reynolds and the Philip Morris people grieve for all the poor people of Arkansas who will have to pay another 56 cents a pack or else kick a habit they’ve come to love. The tobacco executives are not concerned about lower profit margins when people give up the habit or children don’t take it up but rather about struggling families who will have to choose between food or medicine on the one hand and their smokes.
But that is only for public consumption. The real campaign has nothing to do with the sons and daughters of toil but with convincing a couple of dozen lawmakers, or fewer, who have never evinced the slightest concern for the poor and the awful choices that low-wage workers have to make.
The couple dozen legislators are not altogether or maybe not even predominantly Republican, but that is a handy cohort to target. Eight of the 35 state senators, one short of enough to kill the tax, are Republicans. Twenty-eight of the 100 representatives, two more than are needed to kill the bill in the House, are Republicans. You only need to stop it in one house or the other. A perverse amendment to the Constitution in 1934 requires three-fourths of both houses to increase a tax that existed that year, which includes the cigarette excise tax, enacted in 1929. That took the power to set tax policy away from a majority and delivered it to a tiny minority.
(Not all Republicans are always wrong on this issue. Sen. John McCain, in his maverick phase, famously led a failed campaign 10 years ago to raise the federal tax by $1.10 a pack to drive people from tobacco.)
What they need to do is introduce a bill raising the sales tax on cigarettes from 3 percent to whatever level produces the $86 million needed for the trauma network and the other medical programs. That might be 20 or 25 percent, depending on whether the tax was collected on the wholesale, distributor or retail price. Arkansas had no sales tax in 1934 so it could be levied or increased by a simple majority of both houses — 18 senators and 51 representatives. The legislature enacted the first sales tax in 1935 when President Roosevelt threatened to cut off all relief programs to Arkansas if the state did not raise money to match federal relief to the vast numbers of unemployed as the other 47 states were doing and to pay schoolteachers.
That would make this a short fight because most legislators in both houses support the tax and the health programs. The tobacco shills could go home, the governor could husband his political capital for another cause, tens of thousands of Arkansas youngsters would not become slaves to tobacco, and a habit that places a mammoth burden on the public health-care system would finally begin to pay a modest share of its enormous cost to the state. That would be a bargain for everyone.