Politicians build their legends with bogeymen. So explains the purpose of “Big Tobacco” these days, tarred, feathered and taxed as punishment for hooking legions of customers on its relaxing, appetite-suppressing and hip-ifying — if not cardiovascularly-correct — products.
But in an act of North Carolina jujitsu, the tobacco industry concurrently hooked state governments, including West Virginia’s, on a steady, healthy flow of smoker-provided cash. In the process, it inextractably aligned its interests with ours, no matter what the politicians might threaten.
That’s why we got such a chuckle out of Attorney General Darrell McGraw’s stern announcement last week that he’s suing tobacconists R. J. Reynolds and Lorillard over the infamous 1999 “Master Settlement Agreement” that’s funnelled billions to individual states from nation’s largest tobacco companies. He wants more money to protect our state’s “public health” by stopping the Mountain State from smoking.
This sounds admirable enough until you put down the press release and check out our budget bottom line.
Some 308,000 West Virginians currently like to light up, paying about $305 each per year in state taxes. And that’s a good thing. Because if they didn’t, the state would have a $155 million hole in its annual budget that even the uncool and nicotine-free among us would have to chip in to fill.
As it stands today, our smokers carry that load as an unwitting favor to everyone else. In total since 1999, they’ve contributed about $900 million via taxes on their habit to fund our state government. That’s a lot of money — it would equal about 25 percent of West Virginia’s entire yearly budget — coming from a small minority of people, a disproportionate amount of whom are low-income and can afford it least.
In Economics 101 they call these kinds of taxes “regressive,” meaning they hurt the poor most. This is quite ironic, given that when McGraw and his fellow attorneys general filed suit against “Big Tobacco” in the first place, they claimed to be doing so precisely on behalf of these low-income smoking “victims.”
McGraw said his lawsuit would help the poor, but instead it’s cost them hundreds of millions in additional taxes. Now our state is spending millions to fight cigarettes, all while hoping it doesn’t succeed so as to flood Charleston in red ink.
Somebody’s got to smoke in West Virginia, or else the state won’t have the money to fund its fight on smoking and a whole lot else. Thanks to the “War on Smoking,” now we’re all shareholders in the tobacco industry.