State Budget Committee Votes to Give Tax Break to Philip Morris USA

Vote follows Committee’s decision to double cuts to tobacco prevention programs

Madison, Wis.—June 1, 2011—The Joint Finance Committee voted Tuesday, 13-3, to change taxation on smokeless tobacco products from one based on price—where the tax automatically follows inflation—to one based on weight, which would make some smokeless tobacco much less expensive and give a competitive edge to the tobacco giant Philip Morris USA. The vote to give Philip Morris USA a tax break comes almost immediately following the Committee’s decision to double cuts to the state’s popular and effective Tobacco Prevention and Control Program.

In response to the change, Gail Sumi, Wisconsin Government Relations Director for the American Cancer Society, Maureen Busalacchi, Executive Director of Health First Wisconsin – Home of SmokeFree Wisconsin, and representatives from a coalition of health groups issue the following joint statement:

“Yesterday’s vote coupled with the committee’s decision to double cuts to the state’s successful and popular Tobacco Prevention and Control Program is devastating to the health of Wisconsin and sets the state up for a future with more needless addiction and higher health care costs.

“Instead of taking a stand against the number one cause of preventable death in Wisconsin, our leaders have turned their backs on the health of our youth. The tobacco giant Philip Morris USA already targets our kids by the bright packaging of their smokeless tobacco products and their candy-like flavors such as grape, cherry and apple. According to Campaign for Tobacco Free Kids, two of UST/Altria’s smokeless brands, Skoal and Copenhagen, make up for half of all smokeless tobacco use among kids. These are the very brands our leaders voted to reduce taxes on.

“By providing a tax break to Philip Morris USA to make the company’s hazardous products cheaper, the Committee is allowing these products to become even more appealing to youth. Numerous studies have shown tobacco prices have a significant effect on smoking rates, especially among price-sensitive teenagers.

“Smokeless tobacco contains two to three times the amount of nicotine found in a cigarette and its users face upwards of 50 times greater risk of developing gum and cheek cancer as well as significantly higher rates of cancers of the larynx and esophagus.

“Wisconsin already spends $2.8 billion annually on tobacco-related health care costs. Roughly $500 million of that is picked up by taxpayers in the form of Medicaid. At a time when Medicaid costs are dramatically increasing, our leaders should consider reducing these numbers through prevention, instead of making decisions that will only amplify these costs in the long run. Saddling future generations with the weight of increased addiction due to decreased tobacco taxation will harm the state’s physical and fiscal health. 

“We do want to thank JFC members Rep. Robin Vos, Rep. Dan Meyer and Rep. Daniel, LeMahieu who voted against this short-sighted and irresponsible amendment. We urge the full Legislature to reverse this provision and protect Wisconsin’s kids from the cancer-causing dangers of smokeless tobacco.”

The change in taxation of smokeless tobacco products is scheduled to go into effect January 1, 2012.

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