Chapter

The Proposed Federal Settlement

in Smoke-Filled Rooms

Published by University of Chicago Press

Published in print June 2002 | ISBN: 9780226857473
Published online March 2013 | e-ISBN: 9780226857480 | DOI: http://dx.doi.org/10.7208/chicago/9780226857480.003.0002
The Proposed Federal Settlement

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This chapter looks at the proposed resolution, which was not in fact a voluntary agreement between the cigarette industry and all the state attorneys general. The more important complication was that the value of the payments would vary proportionately with the unit sales volume of tobacco products. Marketing the settlement as a damages payment by the companies rather than a tax ultimately borne almost entirely by smokers clearly boosted the public salability of the effort. Antismoking critics of the Proposed Resolution wanted to have it both ways. They liked per unit taxes borne by smokers because such taxes would discourage consumption and reduce societal smoking rates. But they also wanted companies to suffer and to bear all the tax, and they wanted payments to the government to remain the same even as sales declined with high per pack tax levies. The significance of the proposed policy changes was enormous. The Proposed Resolution would have given the FDA authority to regulate cigarettes as a drug.

Keywords: Proposed Resolution; payments; antismoking; unit taxes; cigarettes

Chapter.  7427 words. 

Subjects: Company and Commercial Law

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