D.C. sending mixed messages to Georgia smokers

Lindsey Stroud

Democrats in the House Ways and Means Committee have unveiled a new tax proposal which would double the federal excise tax on cigarettes and significantly increase the tax burden on other tobacco products – including less harmful smoke-free alternatives, that are regulated by the U.S. Food and Drug Administration (FDA). 

Ultimately, it will be low-income Georgians and small businesses footing the bill. Sen. Warnock should oppose this measure. 

Under the proposal, the federal excise tax on cigarettes would double to $2.02 per pack. Other tobacco products would see their tax rate increase exponentially. For example, the current rate of chewing tobacco is $0.03 per ounce. Under the Democrats’ tax proposal, this would increase by more than 2,000 percent.

Congress and the FDA are sending mixed messages. Congress is disregarding the FDA’s recent authorization of IQOS as a modified risk tobacco product, which is sold in Georgia. IQOS is authorized to be sold with a disclaimer that the heating of tobacco (rather than burning) “significantly reduces the product of harmful and potentially harmful chemicals.” Under the tax proposal, a reduced risk tobacco product would be subject to the same tax burden as combustible cigarettes. If the proposed tax is instituted it would be a step backward in helping adult Georgians quit cigarettes. 

In 2020, according to data from the Centers for Disease Control and Prevention (CDC), 15.8 percent of adults in Georgia were classified as current smokers. Figuring a pack-per-day habit, in 2020, a smoker in Georgia spent more than $500 in taxes related to cigarettes, more than $385 which was given to the federal government. This would increase to nearly $900 annually in taxes.  

This tax proposal flies in the face of President Biden’s campaign promise to not raise taxes on persons earning $400,000 a year or less. It will disproportionately burden low-income persons who smoke and tend to spend more of their disposable income on cigarettes. 

In 2020, among current adult smokers in Georgia, 31.4 percent reported earning less than $15,000 per year and 20.6 reported incomes between $15,000 and $24,999. Only 11.1 percent of adult smokers reported earning $50,000 a year or more. Unfairly, these lower income persons will end up spending a greater percent of their income in taxes. 

Increasing tobacco taxes will also severely impact small businesses, many who rely on the sales of cigarettes and tobacco products, and who are still suffering the effects of COVID-19. In Georgia, according to the Georgia Association of Convenience Stores, nearly 40 percent of sales in convenience stores consisted of tobacco products. In the wake of draconian tax on such products, store owners will be forced to lay off employees, or worse, close down their business. 

This is the wrong policy to push on consumers at a time when the nation is still dealing with COVID-19 and an uncertain economic future. The tax on vapor products will dissuade traditional cigarette smokers from switching to safer alternatives. 

Georgia tobacco users should not be targeted to foot the bill for Washington’s spending plans and should be urging their own lawmakers to make sure their voices are heard. 

Originally published in the Savannah Morning News.