We need your help in opposing a massive tax increase that has been introduced in Congress. PCA has been actively engaged in opposing tobacco tax equity for years, with this rendition introduced September 26, 2023. This bill has been introduced in the past and has faced rejection each time, and we believe it is vital that we continue our efforts to ensure it does not become law.
Here’s a brief overview of the key points we’ve raised in our opposition:
- Lack of Equity: Tobacco Tax Equity, while claiming to promote fairness, fails to recognize the diverse nature of tobacco products and their varying impacts on society. It proposes a uniform tax rate that does not consider the unique characteristics of different products.
- Disproportionate Impact: We’ve highlighted concerns raised by civil rights activists such as Al Sharpton and the ACLU, who have cautioned against policies that could create illicit markets disproportionately affecting vulnerable communities. The provision imposes a regressive tax that mainly burdens those who can least afford it, particularly products culturally favored in black and brown communities.
- Threat to Small Businesses: The tobacco industry comprises thousands of small businesses, including family-owned manufacturers and local retailers. The provision threatens their livelihoods and aims to consolidate market control among large corporations, resembling a tactic used by organized crime.
- State-level Taxation: Many states already impose high taxes on tobacco products, with rates as high as 95% of the wholesale price for “large cigars.” Introducing a federal tax hike on top of these state taxes would force businesses to close and deprive states of revenue.
- Failed Tax Increases: We’ve emphasized that previous tobacco tax increases have not delivered the expected results. Despite these increases, tobacco consumption has steadily declined, and revenues have dropped significantly, posing economic challenges for the industry and the government.
- Responsible Governance: We’ve stressed the importance of promoting responsible governance. Adults aged 21 and above should be allowed to make informed decisions about tobacco consumption. Targeting underage consumption should be achieved through law enforcement and support for T-21 policies.
In light of these concerns, the PCA is urging Congress to oppose Tobacco Tax Equity every time it is introduced. This bill, if passed, would have severe consequences for our industry, your businesses, and our shared livelihoods.
We encourage you to stay informed about this issue and support our efforts to protect the premium cigar industry. Your voices and advocacy are crucial in helping us fight against policies that could harm our businesses and communities.