Posted on 01/23/2009 11:37:37 AM PST by azkathy
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Massive Tobacco Tax Increase by Congress Spells Even More Economic Disaster for Jobs and State Economies
EDITOR'S NOTE: To see how much money your state stands to lose if the federal excise tax on cigarettes and tobacco products is increased, please go to the website, http://www.tobacco.org/news/277342.html
MINNEAPOLIS, Jan. 12 /PRNewswire/ -- In an urgent message to Congress and President-Elect Barack Obama, the National Association of Tobacco Outlets (NATO) and two other national wholesale trade associations have taken out an ad warning of "economic disaster" for state economies and American jobs should tobacco taxes be raised to fund the expansion of the State Children's Health Insurance Program (SCHIP).
"The politicians in Washington who are pushing for a punitive 156 percent increase in cigarette taxes and even higher tax increases on other tobacco products will exacerbate the current deep recession through the loss of up to 117,000 union and non-union jobs and at least $1.8 billion annually in lost revenues for the states," said Tom Briant, NATO's executive director.
The U.S. Labor Department reported just last week that the national unemployment rate jumped to 7.2% with another 524,000 jobs lost in December alone. "Why would any member of Congress and President-Elect Obama support a huge tax increase that will only serve to put another 117,000 Americans out of work?" inquired Briant.
"During these recessionary times, and as Obama has publicly stated, the government needs to do everything possible to protect and 'save' jobs plus stabilize existing sources of revenue," Briant said. "Using tobacco taxes to fund health care for the middle class would have just the opposite effect."
Briant, whose organization represents tobacco retailers throughout the U.S., said, "Unlike Wall Street financial firms, the retailers, wholesalers and manufacturers of tobacco products, which employ almost 1.2 million Americans, are not asking for a government bailout, but we are asking that our chances for survival not be torpedoed by a huge tax hike in these turbulent economic times."
When cigarette prices rise due to tax increases, legal tobacco sales decline. Lower sales mean lower profits for tobacco retailers and wholesalers, driving job losses. As legal sales decline, the states collect less revenue from both state tobacco excise taxes and sales taxes on these purchases. The states also lose income from annual payments they receive from tobacco manufacturers through the Master Settlement Agreement (MSA), reached in 1998. To date, states have received more than $8 billion in MSA payments since 1998, but those payments are based on the number of cigarettes sold. As sales decline, MSA payments to the states decline.
"This tax increase will also give additional impetus to the illegal sales of tax-free tobacco products on the Internet and from the black market, which are already huge problems for law enforcement in many states," Briant said. "This tax hike will be a 'bailout' for the smuggling industry, but not for legitimate small, family-owned retail and wholesale businesses."
Briant noted that higher taxes also put the safety of retail and transport employees at risk. "Delivery truck drivers and retail store clerks are in danger when criminals target higher-priced tobacco products the way gangsters targeted alcohol during prohibition," he said. "It's not uncommon to hear of stores robbed only for the cigarettes -- the cash register is left untouched.
"President-elect Obama also needs to be reminded that he promised during his campaign not to raise taxes on anyone making less than $250,000 a year," Briant said. "Yet, virtually every smoker in the country makes less than $250,000 a year. Clearly, this huge tax increase would be a violation of the president-elect's campaign promise.
"Congress and President-Elect Obama need to fund the expansion of SCHIP in a responsible manner without putting another 117,000 Americans on the unemployment rolls," said Briant.
Contact Information:
Thomas A. Briant, Executive Director National Association of Tobacco Outlets 15560 Boulder Pointe Road Minneapolis, MN 55347 Office: 1-866-869-8888
ping
Well, looks like I’m just gonna have to swith to pot like ZerO. Seems like the costs are going to be competitive....
The real ridiculous thing about this increase, as WSJ pointed out, is that they’ve created an entitlement that will continue to grow, and have chosen to pay with it via taxes on an ever-decreasing pool of smokers.
Get ready to may a lot more for that stogie this Spring...
I'll have the occasional stogie, but no more dollars per day from Lurker.
L
Oops! It seems that I might already have!
Good luck. I quit last year. One of the smartest things I ever did.
These guys pimp death. I and many conservatives support a tax increase on tobacco. However, I don't support spending the funds.
No conservative should support smoking.
Thank goodness for the indians.
Bush socialism. Damn him.
Time to quit smoking for real this time.
My ‘quit’ date was the end of October, IIRC. But not because of the expense, because of the weather. And sometime in April will be my new year light up day. But, like you, my stogie enjoyment may be curtailed somewhat due to the increased expense. Although, I never have been a stogie per day guy. I have less than 10 a year.
Smokers are gonna be hacked.
Thank God I quit. One of the hardest things I’ve done throwing that monkey off my back, but it certainly has freed up a fair amount of pocket money.
Slave to the leaf NO MORE! 11 months and counting.
This is but one tax that will bankrupt America.
The majority will blindly go along with it, anything to cripple the evil smoker, never realizing that once again, they have allowed the the camels nose to enter the tent before its ugly derriere.
All this will do is create a black market for untaxed cigarettes.
NC legisluts are finalizing their first bill of the year....increasing the taxes on tobacco and alcohol, most folk don’t even realize there’s a gas tax hike stuck in the bill too.
I believe that we will see higher taxes on all fronts until the general public gets hit as hard as the smokers. Imagine if they taxed toilet paper or paper towels the way they tax tobacco. How long would it take for the average citizen to say, “enough already”?
Actually, at this time growing your own and curing your own tobacco is not illegal....just can’t sell it.
You're either conservative, or you support tax increases. The two are mutally exclusive.
L
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