One of the things that amazes me are people who cite regulations against big cigarette companies as an example of regulations working well. They believe that the state’s actions against big tobacco companies that required printing warning labels on cigarette packs, taxing cigarettes, and restring the smoking at to 18 years is undeniable proof that the state wants to protect us against companies that peddle poison. In actuality big tobacco companies, like all other businesses, receive a great deal of protection from the state. Take the recent passage of legislations that taxes owners of roll-your-own cigarette machines the same as cigarette manufacturers, it basically destroys the roll-your-own market and further protects the interests of large tobacco companies:
But a few paragraphs added to the transportation bill changed the definition of a cigarette manufacturer to cover thousands of roll-your-own operations nationwide. The move, backed by major tobacco companies, is aimed at boosting tax revenues.
Faced with regulation costs that could run to hundreds of thousands of dollars, RYO machine owners nationwide are shutting down more than 1,000 of the $36,000 machines.
Not surprisingly Philip Morris backed this legislation:
“I feel it’s kind of shaky,” Wiessen said. “The man who pushed for this bill is Sen. (Max) Baucus from Montana, and he received donations from Altria, a parent company of Philip Morris. Interestingly enough, there are also no RYO machines in the state of Montana. It really makes me question the morals and values of our elected speakers.”
It’s obvious why Philip Morris supported this bill. Large cigarette manufacturers can easily soak up the cost of additional taxes but small shops cannot. While the large cigarette companies have to pay more in taxes, which negatively affects their profits, they also don’t have to deal with many of their former competitors, which greatly increases their profits as customers of those small operations are forced to move to the larger competitors. The state giveth and the state taketh away. While they hurt the interests of large tobacco companies in some ways they’ve also moved to protect those same companies from competition on a free market.
In other words the state doesn’t care if you smoke so long as you’re buying their crony’s stuff.