Proposition 86: Taxing Tobacco

Does the Drumbeat "Ad" Up in California?
Oct 24, 2006 | By Alejandro Benes
Proposition 86: Taxing Tobacco

Here's the truth, and cigar smokers need to face it squarely. In California, you don't have to wage any kind of campaign to persuade people to be against smoking. So, when one of those pesky propositions for which the Golden State is famous makes its way onto the ballot next month proposing to increase taxes on tobacco by 135 percent, the tobacco business is already desperate.

I won't get into the details of the impact such a tax increase would have on cigar shops (devastating), cigar smokers (negligible, annoying) or the state treasury (ambivalent). All I can tell you is that the arguments being blasted on the airwaves by both sides can drive you to drink (until someone proposes taxing the hell out of that too). Since they can't really argue smoking itself, the combatants hurl excrement at each other's arguments by claiming that each side is less trustworthy, less honest than the other. The ads are on TV all the time., a nonpartisan group that researched the issue, reported that by the end of last month, anti-Proposition 86 forces, mostly tobacco companies, had aired more than 10,300 ads. Those in favor of Prop. 86 had put on nearly 1,770. The effort by anti-86 seems to have moved opinion by 10 points against the measure since July. There's no polling, however, on how much the whole air war has moved opinion against the expenditure of, so far, more than $60 million to annoy THE HELL OUT OF ME! I've got a tympany beating in my brain.

The drums! Boom! Boom! Boom! I go on the porch, pour myself a Bacardi 1873 on the rocks and light a Padilla Habano Robusto. The pounding subsides the farther away I get from the TV.

Tobacco shop owners predict that the impact of Prop. 86 -- which is aimed at cigarettes, but also claims cigars as collateral targets -- would be so onerous that many shops would go out of business because cigar smokers would simply stop buying cigars in California. If that's true, there would be no tax revenue from the sale of cigars. So, cigar people argue that cigars should not be lumped together with cigarettes in the tax increase proposal. (That was also done in 1998 by the passage of Proposition 99, a measure similar to 86.) To fight the measure, however, cigar has had to lump itself with Cigarette -- not a particularly comfortable arrangement for many cigar people. In truth, the impact of the measure on cigar sales likely would be to drive business to the Internet, mail order and neighboring states like Nevada, as in Las Vegas and Reno.

The ads are getting more frequent. No one is safe. I'm now starting up the car, pulling out my Xikar cutter and making the Padrón Aniversario puffable. I grab my Dupont Xtend and get to puffing. (Have you noticed there are a lot more "X's" in the cigar biz these days?)

"Big Tobacco," as the pro-86 forces like to villify their enemy, including in this case, the Cigar Association of America, is on the offensive. Remember "Harry and Louise?" That was the scare ad the insurance industry used in 1993 to fight President Clinton's health-care proposal? This campaign has its own version, with an actor on a park bench saying that he "liked the idea of raising the cigarette tax. Then I read the whole 38 pages [of the proposal]." He goes on to say that Prop. 86 "gives hospitals and HMOs too much. At our expense." In another ad, a very suburban-looking woman does the same shtick. The most annoying -- and that's a tight race here -- is the one that says the measure doesn't do enough to prevent smoking. This one has just pie charts and shots of text from the proposal in an effort to prove that only 10 percent of the money raised by the tax would go to making people stop smoking or not take it up at all.

Must get away. Which way should I go? South? Mexican TV won't have these ads. East? Nevada? Pack the Ashton Vavona humidor with my Heritage Puro Sols and vamoose!

In its ads, "Health Care" responds to the "Tobacco" spots with those now famous shots of cigarette company execs testifying to Congress that they did not believe their products were addictive. Still-frames in one ad flash a big "No" and an announcer -- or is it the voice of God? -- intones, "Remember, they lie." Another ad simply puts on the screen the names of the groups that support the measure while the announcer points out that "Big Tobacco's" against it. "Tough decision?" he asks. "Not really," he answers, "not really" wanting you to figure it out for yourself. (As in, "Not really must-see TV.")

"I been drivin' all night, my hand's wet on the wheel. There's a voice in my head that drives my heel." Golden Earring? Or is it Golden Cadillac that sings "Radar Love?" I never get it right, but then I recall that Golden Cadillac is a premium Margarita and that I could use one right about now because that "voice in my head" is still one from the commercials. The drums, though faint, are still beating in my head.

The California Budget Project (CBP), an independent nonprofit public policy group has no TV ads on the matter, but does offer a cogent analysis of Prop 86 that you won't see in any of the nearly 13,000 commercials that have aired so far. The CBP concludes:

"Proposition 86 has lofty goals, but raises several policy concerns. It would increase California's cigarette tax rate to the highest in the United States to help reduce smoking, and it would support hospitals and provide health insurance to low-income children. However, the tax increase would have a disproportionate impact on low-income Californians, who spend a higher percentage of their income on tobacco products. In addition, the measure would likely not provide sufficient revenues to support children's health coverage over the long term. Indeed, the measure's success at reducing smoking would lower tobacco tax revenues and place funding at risk not only for health coverage to children but for other programs funded by Proposition 86."

If you're really interested, read the whole report. Click here. Takes about 20 minutes. It might help silence the drums.

Alejandro Benes assures us that he has enough cigars in his humidor to withstand any assault.