Tobacco Documents Online

n ' RADtiO . New York: 2123091d00 Chicago: 312 541 2020 Detroit: 313 .344-1 177 TVREPORTS Los Angeles: 213 466.6124 Washington, D.C.: 301-656-4068 Boston: 617-536-2232 E IATIQNILMARIWCOVEROQ : I Philadelphia: 215-567-7600 r • ' ! Sa ci : 213 F 466 6124 TRANSCRIPT n ran sco - - Miami: 305-358.3358 FO R PROGRAM DATE PHILIP MORRIS STATION THIS WEEK W/DAVID BRINKLEYCITM 02/28/93 11:30 A.M. AUDIENCE WABC-TV & THE ABC TV NETWORK NEW YORK SUBJECT TAX ON CIGARETTES BROADCAST EXCERPT SAM DONALDSON (PANELIST): The President appeared to have pulled a new tax out of his pocket this past week down the road to help pay for the new medical program, cigarette taxes, and it's being widely said perhaps up to $2.00 a pack. Is that what you're considering? LEON PANETTA (OMB): Obviously; you don't know what we're going to do with regards to a health care reform package until it's done, until we see the actual health care reform proposal itself. I think the President did suggest that cigarettes are something that may be considered. Why? Because cigarettes relate to health problems in this country. DONALDSON: Would you be for $2.00 a pack? PANETTA: I think it's legitimate to look at a cigarette tax as part of the way to pay for health care reform because it's not only paying for it, but more importantly, it may try to inhibit the very kind of behavior that produces health care problems in this country. • ou . be f y r that? o PANETTA: I think that's and I think it's the kind of with the Congress in putting DONALDSON: Senator Harkin and Senator Bradley, among others, have a proposal which I understand will be made again this year. That is for cigarette companies to reduce the advertising amoun-t that they can deduct from 100o down to 800 or even lower. Would - _ ~ something that ought to be discussed C ~, proposal that we're willing to work ~ forward. CG O GEORGE WILL (PANELIST) : About the cigarette tax, what are you ~ assuming about the elasticity of demand for cigarettes if you put ~ a $2.00 tax on them? The ideal social policy aim of the tax would ~ While Radio TV Reports endeavots to assure the accuracy of material supplied by it, it cannu be reepc nsible Ir r inr.takr.s oi omissions, Material ;upplfed by Ru<a- TV Rerx,rtti rnay be used (or file and re(rnence purposes only It m-ry i„_,t I,.• rep+r>rL r, rl ",l<I ri 1,uhl"ly dnin„nstinir•r{ r•xh,ho.-d

- 2 - be to get zero revenue because you want everyone to quit smoking. Are you assuming that people will continue to smoke pretty much as usual to generate 35 billion or whatever they're expecting from this? PANETTA: No. I think obviously the purpose of that kind of tax on cigarettes is not just for the purpose of raising revenues, but also to try to get people to reduce their use of cigarettes so that we don't continue to have health care problems resulting from cigarette smoking. DAVID BRINKLEY (HOST): What would happen if they put a$2.00 tax on cigarettes, George? WILL: Well, clearly that's a product for which, and we know this from Canada, where I think they now have a $3.70 tax on a pack, i,t's a product the demand for which, like for most products, is price elastic. Fewer people would smoke. Some would still continue to because-it's a terrible, terrible addiction accounting for the premature deaths in 1988, the year for which we have the most recent numbers, 434,000 Americans. So as a revenue measure, it may be the gusher that they anticipate, but a social policy -- BRINKLEY: Are you sure of that? Sam, you've been an anti- cigarette campaigner for some time. DONALDSON: I have. Well, you mentioned the Centers for Disease Control figure. 434,000 Americans died from a smoking- related disease in 1988, the latest year for which we have figures. But the cigarette companies say they don't know whether a single American has died. We talked to the Director of Smoking and Health, put him on the air, from R.J. Reynolds. He said, "I don't know what the f igure is." And I said, "Are you suggesting it' s zero?" He said, "I don't know," because the tobacco companies carry on this fiction that there still is. more research needed. "We're not quite certain. Maybe it does. Maybe it doesn't. It is one risk factor." That's nonsense. If you smoke, you're killing yourself and the children around you who get the sidestream smoke. COKIE ROBERTS (PANELIST): So the number could be higher because of passive smoke and all that. DONAL,DSON: Yes. ROBERTS: I think one of the main effects of actually putting a great, big tax on them would be that many fewer young people would smoke because they couldn't afford it. It's just that simple. When you go to college and you go out to buy cigarettes because you think it's cool or because a young woman thinks that she'll be thinner or whatever it is, they'll just can't afford to

do it. And it is one of those things where the sort of symmetry is nice. The notion of using a cigarette tax to pay for health care access when cigarettes are the thing that make people require a lot of health care does have a sort of -- DONALDSON: The Harkin-Bradley thing is something very important. BRINKLEY: Let's say it again. DONALDSON: The Harkin-Bradley proposal cannot let these companies reduce from their income taxes the money they spend on advertising because when they advertise cigarettes, they're advertising for people mainly who have not been hooked yet. Now they say, "We're trying to get brand switches," but that's not true. ` ROBERTS: That's what they say. DONALDSON: Who do you think Joe Camel is directed against? The young people, children. Don't let these companies take it off their income tax. Make them pay. BRINKLEY: Why is it when you go to Europe people smoke as we used to? I mean, everyone smokes as if none of this were known. Why is that? Do you know? ROBERTS: I think that there hasn't been the same public health campaign. It's beginning to happen there now, but it is true that we've gotten very spoiled. I must say there are proposals now to have no smoking in the United States Capitol. Now I think of the smoke-filled rooms of the past and the idea that you can have politicians with no smoking is really an interesting concept. WILL: The most cost effective thing a government does in a broadly educated, information acquiring country such as ours is disseminate public health information because you get behavior modification on a huge scale. ROBERTS: Federal government, George? WILL: Sure. That's one of their three or fou2~ legitimate functions. Let me tell you a story that was in a wonderful American Heritage article about two months ago. 1919 in a St. Louis hospital, a doctor summoned his medical students to an autopsy. He said, "I want to show you a disease so rare, you may not see it again in your practice." It was lung cancer. One of the medical students said he went until 1936 before he saw another case. Then he saw, I think, nine in six months. What had happened was that smoking increased with improved cigarette-making machines,

- 4 - falling prices, and then war. We used to send cigarettes out with K-rations. DONALDSON: Lucky Strike Green goes to war. WILL: General Pershing made the shipment of cigarettes a priority shipment because it was important for morale. DONALDSON: You know, of the Surgeon General's warnings required on every pack of cigarettes sold in the United States, one of them is "Warning: Cigarettes cause lung cancer, emphysema, bronchitis." That's not required if the cigarette goes overseas, the companies don't put it on, obviously. ROBERTS: I think it's interesting, though, that the President's talking about cigarette taxes, but not about alcohol taxes,-and certainly you get as much health-related problems from alcohol as you do from cigarettes. DONALDSON: I'm an ex-smoker, but not yet a reformed drunk. ROBERTS: So you're willing to be very pure on one subject, but not the other. DONALDSON: No. I think it's a good idea to raise the taxes on alcohol, too. BRINKLEY: One more small note on this. I remember a few years ago, New York State put a very heavy tax on cigarettes, which led to bootlegging. There was practically a caravan of trucks going up 1-95 North loaded with cigarettes. The tax had not been paid and everyone in New York -- not everyone, but a lot of people in New York were buying them. The tax was very hard to collect. ROBERTS: But a federal tax would be something different. BRINKLEY: A federal tax you can't evade.