Leader Blues

Wednesday, February 04, 2009

EDITORIAL>>Fallback plan on tobacco tax

You probably have been following the battle over the hearts and minds of the small band of Republicans in the Arkansas General Assembly. Tobacco companies and conservatives have mounted a grassroots campaign to dissuade the Republicans — eight in the Senate and 27 in the House of Representatives — from voting for the 56-cent-a-pack cigarette tax and higher taxes on smokeless tobacco. Republicans are supposed to send letters, emails and phone calls to the lawmakers and to generate pressure from county Republican chairmen, reminding the legislators that Republicans are supposed to be against taxes and more government.

Dick Armey, the former Republican leader of the U. S. House of Representatives and now a shill for the cigarette makers, was at the Capitol yesterday to deliver the message. The health group supporting the tobacco taxes tried to get Armey to debate a Little Rock physician on the tax while he was in town, but Armey demurred. Armey’s job is to travel the country to defeat tobacco taxes that state governments are contemplating, and he’s not going to share the microphone with do-gooders.

Though only roughly a fourth of the legislature, the Republicans find themselves in a powerful position. If they stick together, they can defeat the tax and the statewide trauma network and other medical programs that the tax would fund. Republicans are more than enough to defeat the tax in the House and one short in the Senate because the excise tax requires a three-fourths vote of each body.

One Republican in the House has signed on as a sponsor of the bill. A former executive director of the state Republican Party came out of the closet over the weekend as a supporter of the tax, but his motives looked a little suspicious because he lobbies for a hospital that would benefit indirectly from the tax.

The tobacco taxes and health programs look like an uphill climb despite the celebrated prowess of Governor Beebe in getting legislation passed and the strong support of the leaders of both houses. A few of the 28 Democratic senators and 73 Democratic representatives are holdouts, too. A few ran on no-tax platforms.

A majority ought to rule on all matters that do not affect individual rights, and that includes taxes. It will be a shame if 70 percent of a conservative legislature sees the need for a strong health policy but cannot achieve it.

There is an easy remedy, as we have suggested. Change the tax from an excise tax to a sales tax on the wholesale or retail value of the product. That would change the threshold from three-fourths to a simple majority and also insure a more stable revenue stream. When the tobacco companies raised prices to offset the loss of sales to smokers who kick the expensive habit or who die, the sales tax would keep the state’s revenue stream flowing. They should have the bill in reserve.