Tobacco Documents Online

F 4 , , MlCHAEL R. SPANIOLO . ATTORNEY AND COUNSELOR AT LAW ]837 WAVCRLY HILLS ROAO LANSING. MICHIGAN 441217 •HONt 717 372-2323 Open Letter And Statement To The Citizen's Panel On Smoking & Health October 8, 1980 - 10 A.M. Michigan Department of Health Lansing, Michigan FROM Michael R. Spaniolo I/VZ4`" .~' General Counsel: Michigan Tobacco Industry Advisory Council Tobacco Institute Tobacco Tax Council The Citizen's Panel on Smoking & Health, guided by the Michigan Department of Public Health, is recommending that the ci arette tax be raised by $60 million to discourage smoking and to earmark ~12 million for smoking-health activities. a I I- f I I Senator Edward Kennedy on the Floor of the Senate of the United States, ' November 3, 1978 stated: "Cigarette bootlegging, as it is comm only referred to, has become not only a serious problem for the many states which rely on cigarette taxes for needed revenue, but also has become a major revenue source for organized crime groups. It has been estimated that the states are losing over $400 million a year because of this activity, and that is a very conservative estimate. The only ones profiting from this activity are the major organized crime families which control between 40 to 50 percent of the activity. Cigarette bootlegging is now ranked as the sixth major revenue source for organized crime with a gross of $1.5 billion a year and profits estimated at $800 million. Even worse than the smuggling itself is the violence that accompanies the activity - - truck hi-jacking, armed robberies, serious assaults, extor- tion, murder, and corruption of public officials. - I L t L L The effects of this activity does not stop there. The indirect result of cigarette bootlegging is the loss of jobs and businesses of those lEgiti- L mate wholesalers, vendors, and sales people. In the past 10 years, 50 percent of the employees of wholesalers and vendors have lost their jobs, and 35 percent of the wholesalers have gone out of business because o& this. " ~ 0! . _ . _ . .. .- . . 0~3 -200- ?! •.

I i I Other recommendations being considered are rest_ict'_ons on smoking irn all office and factory areas - with confiscatory expense for the business community as well as governmental agencies. This raises some serious questions about the paternalistic role of big gover^.r.ent. Liberals often try to portray those who question the validity of the welfare state as cold hearted monsters who enjoy turning of_` the heat in senior citizen homes who are deliquent in paying their energy bills. This is an emotional smokescreen obscuring the real issue which involves the extent to ~.qhicn federal and state governments should devote time and money to telling us what we should or should not do. It is not as if the government is dealing with an obscure issue. The American public has known since the 1960's the alleged effects of smoking and the warnings. Their choice to smoke may be a cause of concern to those individuals involved, but should it be the focus of governments job to tuck us in every night? Why should the taxpayers be forced to pay for a program that tells people how to behave? The question of smoking has long ceased to be a question of ignorance. It is a question of the smoker's will to quit. Spending state tax money to inspire will power is an obvious extension of the welfare state. In a broader sense, it is an intrusion into our freedom. We might as well be spending state_tax money to promote health foods, "because it's good for you". Certainly ;Iichigan and the Department of Health could find a more urgent use for tax money_- especially in view of the Governor's call for serious budgetcuts - in view of declining tax collections, unemployment, and business closings. Government doesn't seem to want to listen to what the voters are saying and continued ignoring will bring a tax revolt and the confrontation at the pass. Some of the Panel's recommendations envision the creation of a huge health department bureaucracy at local and state levels. We can forsee an ambitious program with a Smoking-Health unit in every local health department in Richigan with an overseer division of the State Department of Health, at the cost of millions of dollars. No one has estimated the cost in taxes. We can assure you that this is the sort of thing that is fueling the Tisch Amendment drive. The Panel's recommendations are being circulated state wide and are today being examined by the Tisch forces. This will undoubtedly make thousands of votes for Tisch. We hope that Governor-Milliken will consider carefully the recommendations made by the Panel and their impact on the business community, on all govern- ment agencies, and the unions which will be effected. The $60 million requested increase in the cigarette tax - the most regressive tax on the books - is an open invitation to organized crime to take over the cigarette business as has been done in other high tax states. We ask Governor Milliken to say "No" to the $60'million tax increase, to the proposed bureaucracy for Smoking & Health at state and local levels, and to the proposed Michigan Clean Air Act with its confiscatorv provision for the GO ~ business community as well as all government agencies state and local V , . M O -201- ~