Tobacco Growers Ready to Rumble Over 25 Cent Tobacco Tax Increase Proposal Says National Tobacco Council, Inc.
HOLLY SPRINGS, N.C., Feb. 9 /PRNewswire/ --
The Clinton-Gore Administration's Fiscal Year 2001 budget includes a 25 cents per pack increase in the federal excise tax on cigarettes and accelerating the effective date of a 5 cents per pack increase from J
``Tobacco growers are outraged, fed up and ready to fight. Those who relied upon others to fight the tax battles in the past are realizing that this is the last straw from a President who said he felt their pain and vowed to help them,'' said National Tobacco Council, Inc. (NTC) President Lisa J. Eddington. ``To say that tobacco farmers, their families and communities are frustrated in the face of a downward spiral is an understatement. When you pile proposed tobacco tax increases on top of the droughts, floods, hurricanes, snowstorms, and quota cuts, the result is a devastated industry being kicked while it's down,'' Eddington said. Growers in flue-cured states learned in December that their 2000 quota, the amount of tobacco they are allowed to grow, had been cut 18.5%; the 2000 quota for burley growers was cut over 45% on February 1.
Tobacco growers and supporters are contacting the National Tobacco Council for information about how to express their opposition to the proposal. ``They want to know how they can write, call, email and meet with their Members of Congress and to how contact the President's office directly. They are focusing on the message of Oliver Wendell Holmes who said 'The power to tax does not include the power to destroy,''' said Eddington.
From the perspective of the tobacco grower, the Clinton Budget Proposal is purely hypocritical. ``It specifically addresses protections for farmers and farming communities by noting its support for the Master Settlement Agreement. However, tobacco tax increases will seriously jeopardize future industry payments to the States and Grower Trust Funds established under the Master Settlement Agreement,'' said Eddington.
The American Economics Group (AEG) estimates that nearly 73,000 people will lose their jobs as a result of the Clinton-Gore Administration's 30 cents per pack tobacco excise tax increase; over 7000 of these will be tobacco growers. Eddington explained, ``Tobacco growers are particularly harmed by tobacco tax increases. When consumption falls as a result of tobacco tax increases, the amount of tobacco that US growers can produce will decline. Coupled with the other negative factors affecting the grower sector now, this also means tobacco growers will be put out of business.'' Then the ripple effect kicks in. ``Tobacco dollars typically turn over four times in local communities so declines are also felt by small industries and businesses that many not seem related, such as farm equipment dealerships, banks, grocery stores, clothing stores and all other businesses in the communities where tobacco growers spend their money,'' said Eddington.
Federal, State and local governments currently receive over $13 billion annually in tobacco taxes -- that's over $50 for every American man, woman and child. A 10 cents per pack tobacco tax increase became effective on January 1, 2000 and a 5 cents per pack increase has already been passed for January 2002. ``Tobacco is already contributing more than its share to pay for programs which benefit ALL Americans. Destroying an American industry with additional excise tax increases jeopardizes the very programs funded by tobacco taxes; they are killing the goose which is laying golden eggs,'' said Eddington.
The NTC serves as an industry-wide forum for the discussion and consideration of legislative and regulatory issues of common interest and concern to all segments of the tobacco industry. The NTC is comprised of tobacco growers, auction warehousemen, processors or leaf tobacco dealers, tobacco product manufacturers, wholesale distributors and retailers of tobacco or tobacco products, and others engaged in the business of growing, processing, manufacturing, wholesaling or retailing of tobacco products.