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Tags: economic package | tax increases | democrats

Dems Propose Tax Hike on Tobacco, Nicotine to Help Offset Economic Package

Dems Propose Tax Hike on Tobacco, Nicotine to Help Offset Economic Package
(Getty)

By    |   Wednesday, 15 September 2021 03:11 PM

Democrats have proposed raising taxes on tobacco and nicotine to help finance their $3.5 trillion economic package, a move Republicans say would violate President Joe Biden’s pledge not to increase rates on Americans who make less than $400,000 annually, The Washington Post reported on Wednesday.

Democrats say the proposal could help them raise $100 billion in revenue over the next 10 years.

The heaviest users of cigarette smokers are middle-income or lower-income Americans, according to federal data, with as many as 80 percent of smokers having incomes of less than $200,000 a year.

Democrats say, however, that the proposal does not violate Biden’s pledge, with a White House official pointing out that smoking is not a required cost for working families and higher taxes on those products would not directly affect their incomes.

They also stress the proposal’s public health imperative, with the Campaign for Tobacco-Free Kids estimating the tax hike could reduce the total number of smokers in the nation by 1.1 million in the first year and also deter more than 500,000 kids from becoming addicted.

Urban-Brookings Tax Policy Center senior fellow Howard Gleckman told The Washington Post there is “absolutely, no question” that the proposal breaks Biden’s promise, but added that it does not mean it is bad policy, stating that “it clearly is a tax increase, and it clearly has benefits.”

The proposal was made by House Ways and Means Committee Chairman Richard Neal, D-Mass., as Democrats attempt to complete work on their $3.5 trillion package. Democrats hope to raise most of the needed funds for the package from a series of tax increases, including on wealthy Americans, profitable corporations and investors.

The U.S. government last increased federal excise rates on tobacco in 2009, although state legislators have since then added more taxes targeting these products.

Georgia Rep. Drew Ferguson, a Republican member of the Ways and Means Committee, said Democrats are striking the wrong balance by proposing tax increases on tobacco that could hurt lower-income families, while at the same time wanting tax breaks for wealthier ones who can buy electric cars.

“We’ve got folks making less [and] paying more taxes, and folks making a lot are getting a tax break,” he said.

© 2021 Newsmax. All rights reserved.


Politics
Democrats have proposed raising taxes on tobacco and nicotine to help finance their $3.5 trillion economic package, a move Republicans say would violate President Joe Biden's pledge not to increase rates on Americans who make less than $400,000 annually.
economic package, tax increases, democrats
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2021-11-15
Wednesday, 15 September 2021 03:11 PM
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