• Texas Congressional Delegation Should Oppose Taxing Working People

  • Texas Congressional Delegation Should Oppose Taxing Working People

    With the pandemic, an uneven economic recovery, inflation, and the almost impossible task of finding
    employees, this has been a trying year for small businesses in Texas. And with the border crisis, it seems
    like Texas has been is the focus of too much bad news. But the Texas Congressional delegation –
    Democrats and Republicans alike – can do one thing to bring some good news to those struggling in this
    region.

    Congress is considering raising taxes on working families by raising the Federal Excise Tax for tobacco
    products by over $100 billion. Texas Democrats should oppose this measure and help keep costs down
    for struggling families and keep jobs for Texas retailers.

    This tax will double the federal cigarette tax from $1.01 per pack to $2.02 per pack and increase taxes on
    other tobacco products like snuff by over 1,600%.

    President Biden and his Administration have repeated many times that they would not increase any
    taxes on any American making less than $400,000 per year. But this tax increase would do exactly that.
    Adult smokers and dippers are overwhelmingly working class.

    In fact, according to the Joint Committee on Taxation, which assessed this proposal, two-thirds of this
    tax will be paid by taxpayers making under $75,000. Over a third of the tax will be paid by those making
    under $40,000.

    Texas adult tobacco consumers already send $1.3 billion dollars in excise taxes, fees, and settlement
    expenses each year to the federal government. The government should live within its means, just like
    families have to, before raising taxes for more government programs. The economy can’t recover with
    more taxes targeted at working families. Any tax imposed at the cash register is money out of their
    budgets.

    This tax won’t just hit working families. A study by Chmura Economics & Analytics commissioned by the
    National Association of Tobacco Outlets finds that this proposal will cost Texas $267.3 million a year in
    lost sales, tax revenues and labor income, and result in over 1,100 lost jobs.

    Retail merchants like us generate over a third of our in-store sales from tobacco, so this is an existential
    threat. Small businesses have been essential during this pandemic and can’t afford to lose sales, and
    South Texas simply cannot afford those job losses in 2021.

    The sale of tobacco products are already highly regulated and taxed. But we can’t compete with illicit
    markets that will flood the state with untaxed tobacco products when consumers are faced with huge
    tax hikes. This is exactly what happened when the Federal Excise Tax was raised in 2009. And illicit
    markets don’t card minors.

    Right now, there are more important issues for the government to focus on – starting with the COVID-19
    pandemic and inflation. These issues are stretching family budgets and small businesses beyond the
    limit.

    The Texas Congressional delegation should do everything possible to remove this massive tax increase
    from the budget reconciliation bill. I hope all members, in a bipartisan fashion, will look to closing
    loopholes and other methods before taxing working Texans.

    Paul Hardin, CAE, President/CEO Texas Food & Fuel Association