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Tobacco Companies Fend off Cigarette Tax Hike

June 7, 2012

Thanks to a heavy advertising blitz, cigarette makers have apparently managed to beat back efforts to increase the tax on a pack of cigarettes by $1 in the state of California.

While not all of the ballots have been counted as of Thursday, efforts to pass Proposition 29 trailed by over 63,000 votes, according to The Sacramento Bee. Back in March, 67 percent of California voters had backed the initiative, which would have directed an estimated $735 million raised annually by the tax toward cancer research.

Fighting back against the efforts of high-profile celebrity endorsers of the initiative, like cyclist and cancer survivor Lance Armstrong, the tobacco industry poured about $47 million into TV ads that avoided mentioning either cigarettes or smoking.

Instead the “No on 29” effort focused on issues like wasteful government spending, while newspaper editorials pointed out that some of the tax money should go toward lowering the state’s $16 billion budget deficit.

Back in 2006, the tobacco industry managed to beat back a similar initiative, the Associated Press reported. Now with political spending limits effectively eliminated by the Supreme Court’s Citizens United decision, it is likely that nearly any industry can fend off ballot referendums to raise taxes on its products through a well-funded advertising campaign.

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