Tobacco Documents Online

The Tobacco Institute 1$7S 1 Street. .\'orthivest tl'as{zirzgtorr, DC 20006 (S00) 42-1-9X76 FOR RELEASE: CONTACT: November 18, 1993 Media Relations 202/457-9387 SMOKERS ALREADY PAY MORE THAN THEIR FAIR SHARE HIGHER CIGARETTE TAXES CALLED "UNJUSTIFIED" (WASHINGTON, DC) -- A University of Georgia economist called on Congress today to reject the Clinton Administration's plan to raise cigarette taxes by 75-cents a pack. Testifying before the House Ways and Means Committee on behalf of The Tobacco Institute, Professor Dwight R. Lee estimated that the higher cigarette tax would eliminate 82,000 jobs in the tobacco sector. Those jobs have an estimated annual payroll of $1.9- billion. The six major tobacco producing states (Georgia, Kentucky, North Carolina, South Carolina, Tennessee and Virginia) would lose an estimated 33,500 jobs. In turn, he said, an additional 192,000 jobs would be lost nationally. NEWS RELEASE Professor Lee also emphasized that cigarette excise taxes are extremely regressive since they hit hardest at those least able to pay. He noted that both the Congressional Budget Office and the Congressional Black Caucus have been highly critical of the impact excise taxes have on the economic viabilty of lower-income families. Dr. Lee also told the Committee that "clearly, with respect to government costs, smokers are more than 'paying their own way' at current tax levels." Referring to a report released in May of this year by the Congressional Office of Technology Assessment (OTA), Lee noted the OTA claim that smokers "cost" federal, state and local governments $8.9- billion in health care expenditures attributable to smoking-related illness. Dr. Lee pointed out that smokers already pay more than $13-billion in excise and sales taxes on cigarettes. Therefore, smokers presently pay $4.4-billion more in taxes on cigarettes than OTA claims smokers are "costing" government for health care expenditures. He also noted that "a number of experts and government authorities assume that smokers would live longer and make greater demands on the health care system if they did not smoke, and thus believe that reducing smoking might well increase, not decrease, health care costs." Calling the Clinton cigarette tax increase plan "discriminatory and unfair", Professor Lee concluded that it is "simply not justified from an economic standpoint." I # # #