Think of this as a "backdoor" tax. If the taxes are say 20% in your state, and the State and/or Federal government sues the tobacco companies, and wins, the settlement will be rolled into the price of the product. If it takes a 20% hike to cover the settlement, now you have a 40% tax (effectively) that they didn't even have to go through the Legislature with, and didn't have to use that nasty old 'T' word!