[Congressional Record Volume 144, Number 63 (Monday, May 18, 1998)]
[Senate]
[Pages S4961-S4962]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     TOBACCO SETTLEMENT LEGISLATION

  Mr. ASHCROFT. I rise in opposition to the massive tax increases that 
are contained in the so-called tobacco settlement. I want the Senate to 
know that I will fight to kill any tobacco bill that contains a tax 
increase of the magnitude being considered, $868 billion.
  The proposed tobacco bill is nothing more than an excuse for 
Washington to raise taxes and spend more money on Federal programs. It 
a shame that bad decisions made by free people in Washington, DC, 
become the basis for a monumental task. The decision to smoke isn't a 
good decision, but it is something that people are free to do. And we 
are using it as the basis for an incredible and substantial tax.
  Let me just say that this tobacco settlement is the largest proposed 
increase in Government and bureaucracy since the proposed health care 
scheme, which both this Senate and the American people had the good 
judgment to reject.
  It would be a travesty for Congress to use tobacco as a smokescreen 
for imposing this massive tax increase on the people of America and to 
cover an expansion of the ``nanny'' state.
  This massive tax increase would be levied against those who are least 
capable of paying for it. According to the Congressional Research 
Service, ``Tobacco taxes * * * are perhaps the most regressive tax 
levied.''
  Here we have a tax that falls most heavily on poor people. About 60 
percent of this tax would fall on families earning $30,000 or less. Let 
me go to this chart. People earning under $30,000 would pay 59.4 
percent of this tax; people paying $115,000 or more, 3.7 percent of 
this tax. This is nothing more or less than a massive tax increase, the 
incidence of which falls most heavily on poor families earning $30,000 
or less. I think many times these are young families--mom and dad, 
maybe a couple of kids--stretching to make ends meet on $30,000 or 
less, and the lion's share, the overwhelming lion's share, is coming 
out of the pockets of individuals making less than $30,000 a year.
  According to the Congressional Research Service, households earning 
less than $10,000 would feel the bite of the tax most of all. Smokers 
making less than $10,000 would pay in excess of 5 percent of their 
income in additional taxes. This is a massive tax increase on the poor. 
If Washington gets its way, cigarette excise taxes will rise by $1.50 a 
pack. For someone who smokes two packs a day and whose spouse perhaps 
smokes one pack as well, this amounts to a tax increase of $1,642.50 
annually. And that tax increase for three packs a day on the family 
would be the same, whether the family was very poor or the family was 
very wealthy. To find out the magnitude of this tax, if you take $1,642 
a year out of the income of poor Americans, you are really impairing 
significantly their ability to provide for their families.
  It is immoral for this Government to tell poor families, you cannot 
provide for yourselves; we are going to take the money from you and 
force you to come to the Government to ask us to provide for you. 
Moreover, the new taxes paid by someone smoking two packs daily would 
exceed the per capita tax relief contained in the Senate budget 
resolution by a factor of 50.
  The Senate budget resolution proposed tax relief for America. For the 
average smoker, smoking two packs a day, they would have a tax burden 
added to them 50 times as great as the tax relief that we proposed in 
the budget. I think that is unconscionable. It is obvious that the most 
addictive thing in Washington is not nicotine, the most addictive thing 
is taxing and spending.
  In the 15 years prior to 1995, Congress has passed 13 major tax 
increases. A list of those tax increases includes the Crude Oil 
Windfall Profit Tax of 1980, the Omnibus Reconciliation Act of 1980, 
Tax Equity and Fiscal Responsibility Act of 1982, Social Security 
Amendments of 1983. Last year's Taxpayer Relief Act was the first 
meaningful tax cut since 1981.
  The tobacco tax increase will more than erase--more than erase--all 
of the benefit to the American people of the tax cut passed last year. 
The tobacco tax increase also exceeds by a factor of 3 the relief 
projected in the budget resolution passed by the Senate last month, 
even as it applies to the entire population, not just to smokers.
  The Congressional Budget Office expects the budget surplus will swell 
to between $43 billion and $63 billion this year. Why is that? 
Taxpayers are working longer, they are working harder, they are paying 
more taxes. You don't have the swelling of revenue to the Federal 
Government because people aren't paying taxes; you have it precisely 
because they are paying taxes. Taxes are going up. And we should be 
debating how to return money to the taxpayers, not how to siphon more 
out of their pockets--especially out of hard-working Americans at 
lower-income levels. The proposed tobacco bill is nothing more than an 
excuse for Washington to raise taxes and spend more money on new 
Federal programs. I will fight to kill any tobacco tax bill that 
contains a tax increase of the magnitude being considered. It is an 
affront to the dignity of Americans and

[[Page S4962]]

it is immoral to take this kind of money away from poor families, which 
will force them into dependence on government in some circumstances, 
rather than allow them to have the money they earn to spend on their 
families.

  To paraphrase President Reagan, the whole controversy comes down to 
this: Are you entitled to the fruits of your own labor, or does 
Government have some presumptive right to tax and tax and tax?
  I urge my colleagues to oppose this legislation.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.

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