Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, March 10, 1993 TAG: 9303100080
SECTION: NATIONAL/INTERNATIONAL PAGE: A10 EDITION: METRO
SOURCE: Knight-Ridder/Tribune
DATELINE: WASHINGTON LENGTH: Medium
INDUSTRIES BRACE FOR `SIN-TAX' FIGHT
As the Clinton administration edges toward raising "sin taxes" to finance its health-care program, the liquor, beer and cigarette lobbies are preparing to fight back hard.Cigarette industry representatives, fearing a tax of up to $2 a pack, argue that such a steep hike would severely hurt jobs and business in a number of states.
"That would be terrible and ridiculous," said Bill Hecht, who lobbies for Brown & Williamson, a cigarette producer. "You would be penalizing the poor blue-collar worker and virtually wiping out a key industry in Southeastern states."
The current federal excise tax on a pack of cigarettes is 24 cents.
Meanwhile, the Distilled Spirits Council of the United States has launched an advertising campaign against heavier excise taxes, calling them "an unhealthy prescription for health-care reform."
In ads run in The Washington Post and Roll Call, a newspaper that circulates on Capitol Hill, the council argues that "alcohol taxes already pay their fair share. . . . Liquor is already the most heavily taxed product in the U.S., with 42 percent of the price on a typical bottle now going to pay taxes."
If the administration targets cigarettes, it can expect a fight from Congress members in both parties who represent tobacco-producing states. Both Democratic Sen. Wendell Ford of Kentucky and Republican Sen. Jesse Helms of North Carolina are staunch defenders of their states' tobacco industries.
The cigarette lobby maintains that a stiff tax would cause a huge loss of jobs in a half-dozen states. Hecht said even doubling the current tax would cause economic devastation in those regions.
"There are 50 million people who smoke, and they were not expecting this kind of new tax burden," said Craig Fuller, a former aide to President Bush who now works for Philip Morris Cos. He said talk of a steep tax was a "trial dirigible" by the Clinton team - doomed to burst with a bang.
In Canada, where a tax has boosted the price of cigarettes to about $6 a pack, some analysts said smoking has decreased, especially among young people.
Peter Teeley, who was Bush's ambassador to Canada, defends a larger tax on cigarettes. "This may be heresy for a Republican to say, but I think we need a stiff tax to improve health and discourage smoking," he said.