Tobacco tax in reconciliation bill would hurt the poor the most

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The Arizonans have seen their share of challenges throughout this pandemic, but in many ways small businesses and the working class have borne the brunt.

That recovery is now under threat as Democrats in Congress and President Joe Biden demand significant tax hikes to fund their $ 1.75 trillion social security plan. If enacted, these taxes, including levies on tobacco products, will have unintended consequences for generations to come, threatening our state’s economic recovery and national security.

We’ve made huge strides here in Arizona, with companies now taking back 100% of all private sector jobs, according to an August employment report from the Office of Economic Opportunity. Arizona currently exceeds the national average of 79%.

These results are due to the hard work and determination of Arizona residents and small businesses who sacrificed themselves and came out stronger.

Now Democrats are trying to rush the Biden agenda through a reconciliation bill full of unnecessary spending and tax hikes.

Tobacco tax fairness law would hurt Arizona

The $ 1.75 trillion spending proposal is touted as taxing the rich and making them pay their fair share. But the truth is, it actually includes regressive taxes on products used by working-class Arizonans in direct violation of President Biden’s pledge not to raise taxes on families earning less than $ 400,000 a year. .

These taxes are also having a disproportionate impact on retail businesses and convenience stores that have just returned from pandemic cuts.

More importantly, these taxes would fuel the crisis along our southern border by pushing consumers into the underground market at a time when Arizona is ranked among the worst states for illicit trade and smuggling.

Trade relations at our border are a critical part of our economic recovery, which is why one of the most concerning provisions of the reconciliation bill is the one that increases federal excise taxes on tobacco products and nicotine. Our border resources are already limited due to a lack of political leadership and this is the last thing the Arizonans need.

Responsible Arizona retailers invest their time and resources to ensure that their employees are trained to comply with local, state, and federal laws. But in an illicit market, tobacco sales are outside the law, leading to unregulated products potentially intended for users of all ages.

Don’t overlook unintended consequences

Lawmakers must recognize and consider these unintended consequences when adopting tax increases.

The costs don’t stop there. Fifteen to 19% of Arizonans use tobacco products and the majority of them are middle to low income users.

The Tax Foundation found that the fiscal impact of these taxes on Arizona would be a loss of $ 11.4 million, with another report showing the state would lose nearly 100 jobs per year.

As lawmakers return to the drawing board, the time has come for us to demand leadership and accountability from our representatives. Otherwise, voters will hold politicians accountable for their irresponsible spending habits and political decisions that will be felt for generations to come.

Senator Vince Leach represents Legislative District 11, which covers parts of Pinal and Pima counties in southern Arizona. Contact him at [email protected]


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