PHILIP MORRIS SHENANIGANS
I originally published this letter with the wrong culprit named. Philip Morris is the company behind this injustice to our legislative system and to pipe smokers.
BACKGROUND:
On January 13, 2010, Rep. Steve Cohen (D-TN) and co-sponsor Rep. Lloyd Doggett (D-TX) introduced bill H.R. 4439 to congress to raise the federal pipe tobacco tax from $2.8311US per pound to $24.78US per pound and “To amend the Internal Revenue Code of 1986 to impose the same rate of tax on pipe tobacco as is imposed on roll-your-own tobacco.”
This has not been reported by any news agency as this seems to be the way that all anti-tobacco legislation has been happening as of late. “Don’t report it until it has already passed.” So much for transparency!
I originally published the following article in March 2009 prior to passage of SCHIP on 1 April. It was then speculation on my part, but was later verified that the cigarette company I referred to as Cigarette Tycoon is in actuality Philip Morris. There is no doubt in my mind that PM recently lobbied the two sponsoring Democrats (See Above) to have pipe tobacco increased to obtain tax parity with Roll-Your-Own (RYO) cigarette tobacco. It would have made more sense to propose legislation against the cigarette RYO manufactures who discovered the tax loophole, and changed their product name to Pipe Tobacco to get the lower pipe tobacco tax. The quick and dirty solution is to impose an unconscionable tax burden on pipe smokers. No longer do the majority of our elected representatives serve the people who elected them; they serve themselves by being lackeys of the lobbyists, RJR in this case. I have taken a few editing liberties with the original version to enhance its readability; the story-line has not been changed.
March 2009 Article:
The federal tax increase on cigarettes was a no-brainer as the Cossacks had their swords sharp in anticipation of an easy kill. They took no prisoners! The increase in RYO tobacco tax took the industry by surprise. Here is what I speculate happened; I don’t think I am far off.
In the following dramatization, Congressional Cossack and Cigarette Tycoon are the actors. Congressional Cossacks have raided the tobacco village again. Their leader is in a discussion with a village elder, Cigarette Tycoon, to determine how the booty is to be split. Cigarette Tycoon has his own agenda and will sell out the village to feather his own nest. Actor’s cues are shown in italics and are underscored if within speaking lines. The dollar amounts are factual and are often calculated out to 4 decimal places. [Aside: Millions of dollars are squandered every day by governments, but in this case a hundredth of a penny is very important.]
And now, on with the play…
Within a cigar smoke filled room, Congressional Cossack and Cigarette Tycoon are comfortably sitting at a table with chairs angled to table with legs crossed; each smokes a $25 Padron 30th Anniversary double corona while sipping aged scotch, and admiring the fact that they live the good life. Nothing cheap about these guys!
(Congressional Cossack speaks first in a by-the-way manner.)
Congressional Cossack: We’re back to extract more tribute from your village for our general fund! Miss us? Of course not as we’re your worst nightmare.
(Cigarette Tycoon exhibits disguised surprise.)
Cigarette Tycoon: Again? So soon? We’re taxed enough already! Go down the road to Alcoholopis - their granaries are overflowing with tribute.
(Congressional Cossack speaks slowly. Pauses between words to pick tobacco bits from his tongue; admires cigar during pauses.)
Congressional Cossack: Nah, they’re too well fortified and besides they contribute mightily to Czar Obama’s campaign. You’ll do for now until we’re ready to take them on. Their turn is coming - after your village is eliminated. (Points cigar at Cigarette Tycoon in a stabbing manner as if it’s a dagger.) Then where do you think that we’ll get our tribute? But you won’t be around to see it, will you? (Rolls eyes while looking upward; releases smoke rings.)
(Cigarette Tycoon displays resigned manner. His shoulders slump.)
Cigarette Tycoon: How much do you want now? You robbed us blind before with the Master Settlement Agreement. You promised that those tax dollars would be used to educate youth about the evils of smoking our cigarettes, - that they were harming their health by doing so. (Mocking accusation – you’re a thief and a liar.) Then you turned around and transferred millions upon millions of dollars into your general fund - down the toilet. (With resignation.) You’ll do the same with whatever I give you now.
(Congressional Cossack exhibits an ‘aren’t I clever’ attitude.)
Congressional Cossack: Yeah, well now we thought up the sweet idea of a health insurance program for children. You know, those kids that we failed to educate about the dangers of smoking your cigarettes. They get sick, don’t they? We need more tax money and everyone loves kids, don’t they. Children and Health! That’s been a winning tax slogan for us for a long time. And we are not even held responsible for doing anything for those kids after we stuff the tribute into our general fund. Sort of gets lost that way. You know about things like that. People forget as long as we let them have their bread and circuses. We’ll use a similar story when we’re ready to take on Alcoholopis.
(Cigarette Tycoon speaks with conviction - let’s put the deal on the table tone.)
Cigarette Tycoon: How Much? And even if I agree to anything, you’ll have to do something for me if you want this village to survive long enough to pay you any honorary. (Draws out ‘honorary’ in a mocking manner.)
Congressional Cossack: That’s what I like to hear. (Slaps one hand down on table as if in agreement.) Thieves can always bargain honorably with thieves. (Speaks in a manner-of fact tone.) We want to increase the federal tax on manufactured cigarettes from $0.39 to $1.00, a mere 61 cents more per pack. That should generate about $50B over the next four years.
(Cigarette Tycoon stages anger while quickly standing to lean forward with both hands on the table to stare down at Congressional Cossack. Speaks slowly, softly accentuating each word. Congressional Cossack stares off in space to indicate that he has heard this song before.)
Cigarette Tycoon: You must be crazy! You’ll kill our industry! Smokers won’t be able to buy our goods. We’ll both lose money and you’ll lose votes! (Long pause while Cigarette Tycoon takes a long draw on cigar, appearing to search for an already thought-out solution.) However, we might be able to swing a deal if you’ll help us. (Congressional Cossack snickers and shrugs shoulders to indicate a ‘gotcha.’) Otherwise, we might just bring up the subject again of where all the billions of dollars from the Master Settlement went.
(Congressional Cossack remains seated while leaning into Cigarette Tycoon’s space. He exhibits anger as Cigarette Tycoon has raised an issue he doesn’t want to get into. He speaks with a rapid, forced response while his teeth tightly clinch his cigar; exhibits a no-more-time to waste demeanor.)
Congressional Cossack: Quit your griping and tell me what you want.
(CC leans forward conveying about to reveal a secret – speaks softly with confidence. Uses index finger to thump table on strategic words.)
Cigarette Tycoon: We have identified a threat to this village. Our survival is at risk by those smokers who make their own cigarettes, the MYOs are among us. I need for you to tax their RYO tobacco and accessories so hard that that they can’t save much, if anything, by making their own cigarettes. Then they’ll buy ours and you’ll take in more tribute. Can you do that for us?
(Congressional Cossack speaks with a confidence that deal will be made.)
Congressional Cossack: No sweat. We are increasing the federal tax on pipe tobacco from $1.0969 to $2.8126 per pound. Is that enough of an increase for cigarette making tobacco?
(Cigarette Tycoon quietly sits, pulls cigar from mouth, looks out into space, and sneers…)
Cigarette Tycoon: Get real!
(Congressional Cossack leans back in chair, takes a big puff on cigar in anticipation that a deal is about to be struck.)
Congressional Cossack: OK, you probably already have a number in mind or you wouldn’t have brought up the subject. What is it?
(Cigarette Tycoon answers with a rapid, pointed response; said with an unflinching voice, and looks Congressional Cossack square in the eyes.)
Cigarette Tycoon: $24.78 per pound. We want you to increase the federal tax on make-your- own cigarettes tobacco from $1.0969 per pound to $24.78 a pound. And don’t forget the extra tax on their rolling papers and tubes into which they inject tobacco. We want the tax doubled, some tripled. We’re still working out the details.
(Congressional Cossack brings down both hands flat on table top to signal ‘deal-done?’
Congressional Cossack: That it?
(Cigarette Tycoon gently thumps cigar over ashtray with index finger to remove extended ash - speaks slowly with a degree of satisfaction.)
Cigarette Tycoon: For now. We may be back to ask to raise the pipe tobacco tax from $2.816 a pound to $24.78, same as the RYO tobacco, if some wise guy re-labels his product as pipe tobacco. (Say last line with real sincerity) There are some real crooks out there who will take advantage of our good intentions.
(Congressional Cossack rises rapidly, while knocking over his chair to extend right hand and raise left hand with cigar as a salute)
Congressional Cossack: Done! Like I’ve always said, Thieves can always bargain honorably with thieves. We understand each other.
If you can come up with a better explanation for the reasoning used by Congress to justify this disproportionate increase in MYO tobacco, I’d like to hear it. So would those who will no longer be able to afford to smoke cigarettes. A 10.6 ounce container of Stokkeybe Norwegian Shad, sufficient to make 20 to 22 packs of cigarettes, will increase from $25.75 to $43.25 April 1st . A RYO smoker can save a little by continuing to do so, but not much. Besides, how soon before the Cossacks return to extort another increase in honorarium?
CURRENT: It is no surprise that the Congressional Cossacks are back to raid the village again. This time it was initiated by one of ours, Philip Morris. Sure enough, some RYO manufactures have re-labeled their product as pipe tobacco and the fit hit the shan. PM simply went to their Congressional lackeys with a bill provision that taxes Pipe tobacco the same as RYO tobacco. That’s the way the system works. I have a better solution.
WHARF SOLUTION: In their infinite wisdom, Congress passed a bill last year and our illuminating President Obama signed off on it to place tobacco under the purview of FDA. It is now considered a drug product. It would be my guess that the RYO manufactures who re-labeled their product to suit their gains are guilty of changing the name of a drug. Isn’t there a law prohibiting a drug manufacturer from changing the name of a drug to suit their self interest? If such is not the case, aspirin could be relabeled as birth control pills by OB/GYN interests to increase business. If you are thinking that to be a stupid statement, you are correct. However, that statement is as stupid as the bill before Congress to raise the pipe tobacco tax.
I PROPOSE: Withdraw H.R. 4439. Let the FDA do their job.
Ronald G. Houck
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