Texas Ways and Means Committee Considers Ridiculous Proposal from Big Tobacco Companies

Philip Morris USA, R.J. Reynolds Tobacco Company and Lorillard Tobacco Company, three of America's largest tobacco companies, are pushing the Texas Legislature to raise taxes on small tobacco companies. Philip Morris USA, R.J. Reynolds Tobacco Company and Lorillard Tobacco Company, three of America's largest tobacco companies, are pushing the Texas Legislature to raise taxes on small tobacco companies. The big companies complain that because they pay the state extra fees under a 1998 lawsuit settlement, their market share has been unduly reduced. The 1998 settlement "alleged they were misleading consumers about the health repercussions of their products, and advertising to children."

The total hit to the big companies' market share in Texas? 10 percent...from 98 percent before the 1998 settlement. These greedy cancerous cretins.

If the Legislature does pass the tax hike in the next session, the move would benefit the big tobacco companies and hurt Texas. The small companies would be put out of business and soon not pay any state taxes, resulting in a loss of revenue for the state as well as a loss of jobs. "Quite simply, the money is not there," Yolanda Nader, chief executive at Dosal Tobacco Corporation, said. "This is a market share grab. The state does not get the money. The states lose the businesses and the jobs that companies that do business in these states provide."

The Texas Tribune explains another problem...if the Legislature imposes a new tax on small tobacco companies, those companies will actually be paying their dues twice:

 

Texas is one of four states that that has its own settlement with the large tobacco companies. The other 46 states combined their lawsuits into one big settlement. Under this big settlement, companies divide their fees among the states according to their national market share. Texas figures into the calculation of that market share, but doesn't receive any of the fees.

More than 50 of the smaller companies signed onto this national settlement after the fact to avoid similar lawsuits that would probably arise. If they are already paying the fee, then those states have no reason to sue them.

So if Texas imposes an additional tax on the small companies that signed onto the national settlement, then those companies would be paying for their market share in Texas, and then paying again because of the state tax. These companies advocate for a credit that would exempt them from paying for their market share in Texas to remedy this problem. But to do that, all 46 states that were a part of the national settlement would have to agree to it.

Double taxes? I thought the Republican-controlled Legislature was dead-set against this? Why would they even consider this in committee?

Because Republicans in Texas are big tobacco's lap dogs. Their charade about fiscal conservatism is all smoke and mirrors; all they care about is their fatcat donors who want more market share. It doesn't matter to them what benefits Texas, because they're not fighting for Texans. What a drag.

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