Little Tobacco should be taxed equitably

If not immediately, then sometime soon Mississippi legislators need to plug a hole that gives plug tobacco, other forms of tobacco and off-brand cigarettes an unfair pricing advantage.

Gov. Haley Barbour has said he might include supplemental tobacco fees in a special session call, perhaps this week. We won’t know until the governor — who has the power to control topics when lawmakers meet outside their regular dates — prepares his letter setting the agenda.

Going into the 2009 session, it was pretty much a foregone conclusion that the Legislature would increase Mississippi’s excise tax on cigarettes. That was done. Mississippi’s 18 cents-per-pack levy was hiked to 68 cents per pack, effective within weeks of the federal increase to $1.01 per pack.

Add Mississippi’s 7 percent sales tax and it’s clear smokers are paying a lot more for cigarettes today than a few months ago.

But there’s another number in the tally.

Twelve years ago this month, former Attorney General Mike Moore settled a lawsuit against what is commonly called “Big Tobacco.” The term groups major brands who agreed in the settlement to make annual payments to compensate the state for providing medical services to Medicaid and other citizens with tobacco-related illnesses.

According to Altria, parent company of brands such as Marlboro, that settlement is costing consumers 64 cents per pack if — if — they buy from a company that was party to the deal with Moore. Nonsettling or “off-brand” — “Little Tobacco” — companies don’t pay toward the $120 million or more the state gets each year, and so can sell their smokes much cheaper.

Altria, of course, wants the levies leveled in the name of price competitiveness. But lawmakers should add a fee to makers of nonsettling brands because it doesn’t make sense to, in effect, subsidize cigarette companies inflicting the same amount of harm on the state’s people but not paying a penny in damages.

As for tobacco in other forms — snuff, dip, chewing and etc. — Barbour wants to do what the federal government and several states have done — shift to a weight-based tax method that more closely equates the tax on smokeless tobacco with smoking tobacco.

The overall revenue difference to the state would not be great. It’s just a matter of equalization. And it should be done.