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Tallahassee Democrat: Brewster Bevis: Tobacco tax is one more damper on the recovery
Wednesday, June 05, 2013
Increasing taxes at a time when Florida’s businesses and consumers are already strained is not a sound policy decision.
President Obama has released his Fiscal Year 2014 budget, and he plans to raise the tax on cigarettes from $1.01 to $1.95 per pack. Additionally, Congress has introduced legislation to increase the federal excise tax rate on all tobacco products.
This places unfair financial stress on businesses and citizens across the country. As an advocate for the Associated Industries of Florida, I must express opposition to a federal budget recommendation that would increase tax burdens and hurt Florida businesses and, ultimately, families.
With our economy still in recovery, companies everywhere are struggling to become profitable once again. Our small businesses are especially important, because they provide countless American jobs, as a means to mend the financial damage America has suffered since our economy tanked in 2008.
A recent survey shows three out of four Americans would prefer that the government focus on creating jobs instead of imposing new rules and regulations.
I do not believe tobacco taxes should be increased to backfill government budget holes. We need long-term, realistic solutions to our country’s spending problems, not tax increases that place stress on businesses across the country, creating winners and losers in the marketplace. Public officials, both Republican and Democrat, have voiced concerns about raising taxes at a time when the country’s economy is still fragile. High tax rates and increased regulations create a hostile environment for businesses, jobs and economic growth.
Besides businesses, this new recommendation places a strain on consumers. As we all know, consumer spending drives our economy, and history has shown a strong correlation between increased taxes and decreased consumer spending.
Consumer spending accounts for nearly 70 percent of American economic activity, and it is associated with economic confidence and overall improvement. Increasing taxes and burdens on this engine for economic growth simply cannot be the best long-term solution. Decreased consumer spending could slow — if not halt — the economic recovery. As a result, some Americans will continue to be unemployed when they might otherwise have found work.
The proposed tobacco tax will not just affect direct-purchase consumers; this tax will most certainly impact jobs, wages and opportunities across Florida and the country. With our delicate economy striving to recoup from its persistent slump, now is the worst possible time to place yet another burden on consumers.
Tobacco taxes are an unreliable source of revenue and should not be used to fund broad, new government programs. America has always represented the principles of prosperity and free enterprise, and I believe in keeping Florida on a positive track to recovery. Opposing this unwise budget recommendation and legislation will keep Florida and our nation growing.
Brewster Bevis is senior vice president of state and federal affairs at the Associated Industries of Florida. Contact him at bbevis@aif.com.