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Action on Smoking and Health
A National Legal-Action Antismoking Organization Entirely Supported by Tax-Deductible Contributions
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Excerpts from: $13 Billion Tobacco Buyout Bill Introduced in Senate
By Jim Wiesemeyer AgWeb.com
[07/31/03]
Tobacco-state senators on Wednesday proposed a bill (S 1490) ending the 65-year-old
price guarantee program for growers of the crop with a six-year, $13 billion
buyout that would be financed via assessments on manufacturers and importers
of tobacco products sold in the United States. The bill will eventually be merged
with draft legislation restoring Food and Drug Administration (FDA) oversight
of tobacco products.
The buyout would be financed with an assessment on all tobacco companies based on each firm's share of the domestic cigarette market.
Most observers say the cost would be passed on to smokers, adding about 6 cents to the cost of each pack of cigarettes. Some observers say that if an assessment on tobacco companies is passed on to consumers, that would take money away from the tobacco settlement program, which is providing states with revenues to help balance their budgets. That settlement is based on tobacco-product sales that might drop if costs increase. This is why some states such as Kentucky has argued against increasing the tax on cigarettes.
FDA angle. Proponents admit that the buyout package will have to be combined with legislation that for the first time would give the federal FDA the authority to regulate tobacco products -- but it would give Congress the final determination on whether nicotine levels in cigarettes could be reduced to zero.
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