Tobacco Contributions No Spit In The Bucket

Company’s contributions follow favorable tax change for product

September 16, 2008

Madison - An Assembly Republican leader accepted $7,500 in campaign contributions from executives of the nation’s leading maker of smokeless tobacco products shortly after the company successfully sought to change the way the state taxes one of its most popular products among children, the Wisconsin Democracy Campaign has found.

Assembly Majority Leader Jeff Fitzgerald received 24 contributions of $250 and $500 from out-of-state executives of UST – formerly United States Tobacco Company – on February 16, 2008 (see Table). All but three of the two dozen executives had never contributed to a Wisconsin candidate for statewide office or the legislature before. The contributions from mostly East Coast executives represented 38 percent of his total $19,874 in total large individual contributions during the first six months of 2008.

Fitzgerald got the contributions a few months after the legislature changed the tax on moist snuff, which is finely cut tobacco that comes in flavors like apple, cherry, vanilla and grape that users put between their cheek and gum, from a flat tax based on the product’s price to a weight-based tax of $1.31 an ounce.

The tax change, which UST has successfully sought in other states in recent years, was put in the 2007-09 state budget by a committee of Democratic and Republican legislative leaders, including Jeff Fitzgerald. The Republican-controlled Assembly and the Democratic-controlled Senate approved the committee’s compromise version of the budget in late October and it was later signed by Democratic Governor Jim Doyle.

Anti-smoking advocates say the change cuts taxes on the smokeless tobacco product and increases its use among youth by making moist snuff more affordable. Weight-based taxing favors companies like UST that make higher-priced premium brands like Copenhagen and Skoal. In addition, the industry trend is to market single-dose, light weight products whose taxes will be substantially lower than if they were based on price. The use of smokeless tobacco products also is growing among youths and adults because of anti-smoking laws, aggressive health campaigns and the comparatively higher cost of cigarettes.

Fitzgerald and other supporters of the weight-based tax say it is uniform and fairer than a tax based on the product’s price. “It didn’t seem okay to me that if we have a higher-quality product, the tax should also be higher. It gives an unfair advantage to the lower end. People do understand tax fairness. We shouldn’t use taxes to pick winners and losers. It’s a common sense approach,” Fitzgerald said of the tax change in a June 2008 interview with The Heartland Institute.

The $7,500 in UST contributions to Jeff Fitzgerald last February compare to a total of $9,550 in UST employee and political action committee contributions to all Wisconsin legislative and statewide candidates over a 10-year period from 1998 through 2007.

Table: UST Contributions to Representative Fitzgerald

Table
Contributions From UST Executives
To Assembly Majority Leader Jeff Fitzgerald
February 16, 2008

NAME CITY STATE OCCUPATION AMOUNT
Athanasia, Chris Stamford CT Attorney $250
Baldwin, W Preston III Greenwich CT Executive $250
Bolger, Thomas Roxbury CT Senior Director $250
Buongiorno, Joseph New Canaan CT Executive $250
Butler, Daniel Summit NJ Executive $500
Cadd, Gary Nashville TN Executive $250
Chaltas, Thano Stamford CT Executive $250
Delaney, Michael Darien CT Executive $250
Dillard, James III Cos Cob CT Executive $500
Freudenthal, Kevin Southlake TX Executive $250
Hopson, Kenneth Cos Cob CT Executive $250
Ives, Joni Mamaroneck NY Executive $250
Kessler, Murray Bedford Corners NY Executive $500
Kohlberger, Richard Greenwich CT Attorney $500
Kratovil, Edward Greenwich CT Executive $500
Lobosco, Thomas South Salem NY Executive $250
Marren, Elizabeth Darien CT Attorney $250
Nuzzolo, Joseph Ridgewood NJ Executive $250
Patracuolla, James Boonton Township NJ Executive $250
Rozelle, Mark Easton CT Executive $250
Silcock, Raymond Greenwich CT Executive $500
Strickland, James Goodlettsville TN VP of Science and Technology $250
Tamaro, Kenneth Franklin Lakes NJ Executive $250
Younes, Steven Southeast NY Attorney $250
TOTAL $7,500