WASHINGTON — Rep. Bob Etheridge accused the Clinton administration Thursday of “piling on” tobacco farmers with a proposal to raise the federal tax on cigarettes by 55 cents a pack.
“Piling on our already struggling tobacco farmers is discriminatory and unfair,” said Etheridge, D-2nd District. “I am shocked that, in light of the hard times tobacco farmers are facing, that the administration would propose such action.”
Clinton called Etheridge at his Capitol Hill office on Wednesday evening to alert him to the proposal, which was reported Thursday by the Wall Street Journal. The proposed tax hike apparently would help fund the $8 billion in new federal spending that the president will unveil in his budget request to Congress in early February.
The federal cigarette tax stands at 24 cents a pack and is scheduled to rise to 39 cents in 2002. Clinton’s proposal is in addition to scheduled increases. In a settlement reached last year between state attorneys general and the tobacco companies, cigarette makers agreed to pay $206 billion to 46 states over 25 years. Tobacco companies responded to the deal by raising prices 45 cents a pack.
“They’re killing the goose that laid the golden egg,” N.C. Agricultural Commissioner Jim Graham said. “I deeply regret to see any additional tax placed on cigarettes at this time. The tremendous cuts in quotas and the manufacturers already raising prices by 45 cents a pack on cigarettes seems to be enough. Again, we are making the tobacco farmer the whipping boy and taxing him out of existence.”
The Clinton administration is not expected to seek additional money to compensate any losses farmers incur because of the tax. If approved by Congress, the tax would appear in the budget for the fiscal year beginning Oct. 1. Administration officials could not be reached for comment.
In his remarks Thursday, Etheridge, a member of the House Agricultural Committee and a Harnett County tobacco farmer, cited the many setbacks he said tobacco farmers have endured over the past two years.
Herald-Sun, The (Durham, NC) Date: January 15, 1999 Page: A1 Copyright, 1999, The Durham Herald Company