Tobacco Documents Online

SZAam%= OF UiE HZVORABHLE HMARD CO= 11MMMER 18, 1993 K--. Chaima._^, I appreciate the cpportunity to testify before your carmittee today. I am uneTzivocally opposed to President Clinton's recomier.dation that we raise the current 24-cents per-pack federal excise tax on cigarette sales by another 75 cents. From an econcmic stardpoint, the inposition of this increase nakss little sense, resulting as it would in fewer sales. Such an outcare benefits neither those workers and tobacco growers whose jobs are dependent on a vibrant tobacco industry, nor the President who is atterrpting to identify new sources of revenue to pay for catiprehensive health care refon-n nor, most signi.fir.ently, the econanic c~.ll being of our country. In fact, an analysis based on a Price Waterhouse study estimated that 681,353 U.S. residents have jobs linkedd to the distribution and retailing of tobacco products. 1Apprroxdnately 82,000 of these jobs would be lost if the federal cigarette tax is approved. It is my further understanding that nearly 274,000 total jobs nationwide would be lost. Tn addition, such unwelcarec3d change would further burden low- and ~ middle-income families already paying more than their fair share of taxes. ~ C!1 Any federal tobacco tax will severely hurt the carpetitiveness of American ~ industry and hindPr-local econcmic growth. If health care reform or any other goverrmp.nt initiative is designed to benefit all Pmericans, then the sacrifices required to finance such an endeavor m.ast be borne eveenl.y

J throughout society. Singling out persons who use tobacco products, the workers who produce them, and the .farmers who grow tobacco, as the aarnini.stration would do, is patently unfair. The tobacco industry has been hardest hit by excise taxes in the past. Currently, the tobacco industry pays 538.8 billion in excise, personal and cosporate i.ncare, FICA, and sales taxes. Of that anrnmt, $25.9 billion is paid to the federal governmexlt and $12.9 billion to state and local entities. Smoksrs currently pay $13.4 billion more in taxes than non-smokers. The federall goverrm-e.it collects $5.1 billion frcro smokers and states collect another $6 billion. State sales taxes fran tobacco produ.cts generate another $2.1 billion and local govezr.mesits collect more than $200 million in additional sales taxes. I believe this data convincingly damrLstrate that the tobacco industry and ccnsun'exs are already contributing their fair share to the government at all levels. Enough is enough! Nbreover, a 75-cents increase in federal tobacco taxes will be especially devastating to the Southern econaiiy, costing more than three tirms as nany jobs in the South than the rest of the nation. Singling out one industry and region of the country to shoulder an unfair cost of overhauling our nation's health care system is simply unfair. As for my hare state, North Carolina is the world's leading producer of flue-cured tobacco. Increasing the federal cigarette tax by 75-cents per- k m pack would have a singul ar, detrimental impa.ct on our locall econamy. ~ W Currently, nbre than 105,000 North Cas'olinians hold jobs that are linked to O the production, distribution, or retailing of tobacco products; more than N

4 i3, 000 of these jobs would be lost if the tax is enacted. The Sixth District of North_ Carolina is i:are to tobacco fanrers -, worke-. - and manufacturers. There C-ree people who live in my di.strict who worx in each of the fciq;arette plants in our state. Ttt.acco is the number one cash crop in (-.ir district. ?he c:olden leaf has been mighty good econanically to the people of the Sixth District and the state. Finally, Mr. Chairnan, news accounts suggest that some of my fellow tobacco state lacarakers are attecrpting to negotiate a lower rate of tax with the at3.ninistration -- perhaps a 50-cents per-pack increase. I know such offers are well- intentioned, but I remain adamant in my opposition to any increase. Tobacco is a perpetual whipping boy on the Hill, and I do not think this rea.lity . will change through further appeasetnent of tobacco opparients. In sum, this recartrendation will not generate as nuch revenue as supporters suggest; and it will contribute to the growing perception that the Congress cares little about the lives of low- and mi.ddle-inccme Americans. I urge you, Yx. Chainm.n, and the other cannittee naTbers to reject yet another increase in tobacco excise taxes.