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Legislators Blow Chance On Fair Tobacco Taxes

If you’ve rummaged through your teen or ‘tween’s backpack recently, you might have missed the cigars and smokeless tobacco, hiding in plain sight amid the schoolbooks, pens, iPods and breath mints. It’s not that you’re clueless. Rather, the tobacco companies have cleverly packaged the cigarette-sized “cigars” and smokeless tobacco pellets to masquerade as innocuous lip gloss and breath mints.

With cigarillo names like “Happy Hour” and “Prime Time,” and flavorings like chocolate, strawberry and peach, these products are clearly intended for the middle and high school-age crowd. Low prices, teen-friendly packaging, and the myth that cigars and smokeless tobacco are healthier than cigarettes, makes these products a gateway to a lifetime of tobacco use. Although smokeless tobacco products and cigars cannot legally be sold to minors, there are no laws against underage possession of these items, unlike underage alcohol possession.

You can’t blame the tobacco companies. They’re in business to sell products, and if their packaging bamboozles parents and teachers, so be it.

But to bamboozle New Mexico legislators is another story.

Since 1986, a loophole in the tax law has allowed buyers and sellers to avoid the cigarette tax by buying or selling loose tobacco, cigars and spit tobacco in place of higher-priced cigarettes. Simply put, these products are undertaxed compared with cigarettes, due to the influence of the very powerful smokeless-tobacco and cigar lobby.

It’s a loophole New Mexico legislators are unwilling to close.

On Jan. 31, I testified to the House Consumer and Public Affairs Committee in support of HB 133, a bill introduced by Rep. Mimi Stewart to increase the “Other Tobacco Products Tax” in 2012. Along with representatives from the American Cancer Society and the American Heart Association, we made our case for tax parity with cigarettes. The bill would increase the tax on tobacco products, other than cigarettes, to 57 percent of product value, which is equivalent to the cigarette tax rate of $1.66 per pack of 20, and would raise $5.8 million or more for New Mexico in additional revenue.

The testimonies of the lobbyists from RJ Reynolds and Altria were as expected, claiming the tax would be unfair to poor retailers, along with warnings of massive buying and hoarding of cheaper products from other states.

What was unexpected – and frankly floored me – was the commentary from the majority of committee members.

One legislator said that since Gov. Susana Martinez had vowed not to sign any new taxes into law, he saw no point in voting for the bill. Elected officials have a clear responsibility to promote the public good and protect the public health. That means supporting tobacco tax increases despite any no-new-taxes promises. “No-new-taxes” pledges should not be utilized to block legislative actions, such as tobacco tax increases, that will save lives, reduce suffering and reduce government, business and household costs.

Besides, tobacco taxes are actually user fees, not regular taxes. Tobacco use represents a “hidden tax” on all taxpayers, who pay the price with increased medical costs. Tobacco taxes focus the burden of tobacco-related costs on people who actually use the products.

Another legislator said he thought the entire taxation system should be overturned; until that time he found it “unfair” to pick on any one industry.

Still another thought that smokeless tobacco products were not unhealthy; tell that to the U.S. Centers for Disease Control and Prevention, who found that adolescents who use smokeless tobacco are more likely to become cigarette smokers, and that smokeless tobacco is known to cause cancer in humans.

Only one legislator, Rep. Gail Chasey, countered that HB 133 was a public health issue rather than a taxation issue. Chasey was the only legislator out of five who voted for the bill.

Thank you, representatives Chasey and Stewart, for recognizing that our children’s lives are at stake. As for parents, take a closer look in those backpacks. You might be surprised at what you find.

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