Smoke and Mirrors?: If the tobacco settlement becomes law, taxpayers could be the big losers

A chorus of critics is starting to find a flaw in the global tobacco settlement reached by 40 state attorneys general and the tobacco industry. Thanks to vague wording in the settlement, much of the money from the settlement could be misspent, they say, doing little to meet the deal's intended goals: to improve public health and compensate tobacco victims. Worse, critics say as much as 1/3 of the money in the settlement will not come from the tobacco industry at all: Some $140 billion could come out of the pockets of US taxpayers. That is because the agreement says all payments "shall be deemed ordinary and necessary business expenses" - meaning they are tax deductible. Another major problem with the agreement is that Congress, which has been ineffective at taking any punitive action against the industry, has control over how much the tobacco industry should pay.