Newspaper article St Louis Post-Dispatch (MO)

Senate Rescinds Tax Break for Tobacco Firms

Newspaper article St Louis Post-Dispatch (MO)

Senate Rescinds Tax Break for Tobacco Firms

Article excerpt

The Senate voted overwhelmingly Wednesday to kill a tax credit that could have saved tobacco companies up to $50 billion of any national settlement over cigarette sales.

The credit was added without debate or notice to the tax-cut bill that was passed last month. The provision would have let tobacco companies subtract the cost of a tax increase on cigarettes from the pending $368.5 billion national settlement.

Sen. Dick Durbin, D-Ill., who sponsored the amendment to repeal the tax credit, said the vote "sent a clear message to the tobacco industry: . . . Don't try this kind of back-room deception in the future. "It shines and stinks like a mackerel in the moonlight," Durbin said. A spokesman for tobacco companies said the industry had no comment. The repeal faces an uncertain prospect in the House, however, where the leadership opposes any change in the tax bill. Durbin had tried to remove the credit from the tax bill before the Senate passed it. But his first effort failed because senators wanted to leave for their August recess. Tobacco companies have agreed to pay $368.5 billion over 25 years to settle dozens of pending state lawsuits against them in exchange for legal protections and restrictions on government regulation of nicotine. Congress is reviewing details of that proposal, and President Bill Clinton is expected to weigh in next week with his recommendations for a deal. No senator spoke on the floor in favor of keeping the provision. Senate Majority Leader Trent Lott, R-Miss., who joined House Speaker Newt Gingrich, R-Ga., to press Clinton to accept the provision during tax bill negotiations in July, was among those voting to revoke it. Three Republicans - Sens. Lauch Faircloth and Jesse Helms of North Carolina and Mitch McConnell of Kentucky - voted against the repeal. Their states are key tobacco producers. Sens. Robert Bennett, R-Utah, and Jeff Bingaman, D-N.M., did not vote. Durbin's amendment would revoke the 46-word provision and prevent the industry from reducing its payments under any national tobacco settlement by the amount generated by the cigarette tax increase. …

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