Tobacco Documents Online

STATEMENT OF WAYNE ASHWORTH PRESIDENT VIRGINIA FARM BUREAU FEDERATION BEFORE THE HOUSE WAYS & MEANS COMMITTEE UNITED STATES HOUSE OF REPRESENTATIVES ON THE ADMINISTRATION'S HEALTH SECURITY ACT NOVEMBER 18, 1993 Good morning, Mr. Chairman. Thank you for the opportunity__ to appear before this committee. I am Wayne Ashworth of Pittsylvania County, Virginia. I am a tobacco farmer, President of the Virginia Farm Bureau Federation, and a member of the Board of Directors of the American Farm Bureau Federation. I am here today to represent the interests of our tobacco producing families in the burley tobacco belt of Southwest Virginia, the flue-cured belt of Southside Virginia and the Dark- Fired and Sun-Cured tobacco areas of the Central Piedmont. Mr. Chairman, we agree that health care is an important issue. But we think that the survival of thousands of family farms and the economic well being of local communities are serious issues, too. I would emphasize to many of you the importance of tobacco to the general economy of the state, and especially to the farm economy. Virginia is one of the five largest tobacco states in terms of crop value. In 1992, tobacco was the largest cash crop in Virginia. Approximately 200 million dollars in total cash receipts at the farm were derived from tobacco, representing over a quarter of total cash crop sales in Virginia. Tobacco farms are located in over half of Virginia's 95 counties with almost 10,000 farm families producing tobacco. Millions of pounds of leaf tobacco are sold, processed, stored and manufactured into product in our state. I will not mince words: I believe that the proposed tobacco tax increase threatens the very existence of a viable tobacco economy in Virginia; will not obtain the necessary funds to finance a national health program; and is punitive in nature. Since Webster defines punitive as a means "to inflict punishment," I would conclude that the motives and measures of the tax are by nature designed to punish and discriminate against a certain segment of the U.S. population. Anti-smoking advocates are using the power to tax to punish and destroy the tobacco industry. Middle and lower income families who already pay more than their fair share in excise taxes will be punished by having to absorb an even higher share of these taxes. Tobacco farmers and their families will be punished by decreasing and or destroying the source of their economic livelihood. Former Supreme Court Justice Oliver Wendell Holmes once said "The Power to Tax Does Not Include The Power to Destroy While This Court Sits." Do we now condone this type of power? I note that smokers already pay $11.3 billion dollars in excise taxes or over four times what the farmer receives for the sale of tobacco. This would indicate that any time government permits an excise tax to escalate far beyond that of the income the farmer receives for the crop, such a tax is not only ~ excessive but discriminatory. __~ Whether discussing deficit reduction or economic reform it ~ is the historical consensus in our society that taxes should be ~ equitable. Americans have often opted for ability to pay in ~ judging the fairness of the overall tax structure. However, any ~ increased reliance on excise taxes counters this long held ~ philosophy of fairness and can only lead to diminishing returns. CA While it may be politically easy for the administration and some federal lawmakers to advocate increasing excise taxes on cigarettes as a revenue source, the results are often quite different. In fact, state and local governments have learned the reality of diminishing revenues from this "popular punitive tax."

.i 1 A 1993 study by the Council of State Governments calls excise taxes on tobacco a "worn out tax source." The Council urges policy makers to look elsewhere for revenues to fund new programs. Any increase in the excise tax will without question damage our rural economy with the loss of farm income, sector jobs and tax revenue at the local and state level. William Jennings Bryant, in the late 1800s, said it best: "Burn down your cities but leave my farms alone, and your cities will spring up again as if by magic. But allow the farms to be destroyed and there will be grass growing in every street across America." In closing, I urge that you not turn your back on the tobacco farmers of Virginia by enhancing the excise tax on cigarettes. We should be committed to maintaining or increasing our economy, not forcing a large number of productive Virginia families into job dislocation or welfare. Thank you.