April 8, 2013
NACSOnline
Obama’s federal tax increase to fund preschool programs has raised the ire of tobacco companies.
​WASHINGTON – Even before President Obama officially proposed a federal cigarette tax increase to fund preschool programs, many tobacco companies and sellers were already lined up against it.
Obama’s 2014 budget proposal, released April 10, would finance a pre-kindergarten program for 4-year-olds with higher taxes on cigarettes and other tobacco products. The president outlined the program in his annual State of the Union speech.
White House spokesman Jay Carney declined to elaborate on the proposed tobacco-tax increase. “Wait for specifics,†he told reporters at a briefing — but the tobacco industry didn’t wait.
“The idea of increasing taxes on low- to middle-income Americans at this time is ludicrous,†said Bryan Hatchell, a spokesman for Reynolds-American. “As middle-income Americans struggle to make ends meet in a very slow economic recovery period, this is not the time to hit them with higher taxes.â€
“It is unfair to single out adult tobacco consumers with another federal tobacco-tax increase to pay for a broad, new government-spending program,†said David Sutton, a spokesman for Altria.
Convenience stores would also be hurt as higher taxes curb consumer spending, including tobacco purchases that account for 40% of non-gasoline sales for those retailers, said Jeff Lenard, vice president of industry advocacy for NACS. “It is not just the loss of sales, but also the loss of customers,†he said.
However, anti-smoking organizations praised Obama’s proposal. “A significant tobacco-tax increase is a win-win-win for the country — a health win that will reduce tobacco use and save lives, a financial win that will raise revenue to fund an important initiative and reduce tobacco-related health-care costs, and a political win that is popular with voters,†said Matthew Myers, president of the Campaign for Tobacco-Free Kids in Washington.
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