sn^orters surest; and it will centribute to the grcwing pero^jtion that the
Congress cares little about the lives of low- and middle-inoone Americans. I
urge you, Mr. Chairman, and the other ccramittee members to reject yet another
increase in tobacco excise taxes.
Mr. Payne. And the Chair now recognizes Mr. Clement of Ten-
STATEMENT OF HON. BOB CLEMENT, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TENNESSEE
Mr. Clement. Thank you, Mr. Chairman, and members of the
committee, Mr. Sundquist. I would like for my full statement to be
accepted into the record as if read.
Mr. Payne. Without objection, so ordered.
Mr. Clement. And I will summarize my statement. I thank you
for the opportunity to share my views on one aspect of the financ-
ing contained in the President's Health Security Act.
Health care reform is an issue of unparalleled importance to our
fellow citizens. Health care reform is an especially complex issue
and any solution must be approached with both common sense and
fairness, as well as vision and faith.
I thank you for asking questions about the fairness of the excise
tax increases proposed for tobacco products. Much attention has
been focused on the proposed 75 cent increase in the Federal excise
tax on cigarettes. Indeed, tobacco, particularly burley tobacco, was
the number one cash crop in the State of Tennessee.
Receiving less attention, but no less onerous or important, is the
proposal to increase the excise tax on smokeless tobacco products.
I represent in Congress not only the country music capital of the
world, Nashville, Tenn., but also the dark fired, dark air-cured to-
bacco capital of the world, Robertson County. I represent more
than 2,000 farms that grow dark tobacco, and the region stretching
north and west of Nashville into southern Kentucky grows more of
these types of tobacco than any other place in the world.
These two types of tobacco are used in smokeless products, snuff,
chew, pipe tobacco and cigars. Snuff and chewing tobacco are pro-
duced in a manufacturing plant in Nashville that employs 423 indi-
viduals. Consequently, any policy which affects the price or avail-
ability of smokeless products is a source of great concern to me and
many of my constituents.
The President's proposal to increase the tax is a source of con-
cern. The proposal would increase the tax on chewing tobacco by
10,417 percent, the tax on snuff by 3,472 percent, the tax on cigars
by 3,333 percent, and the tax on pipe tobacco by 1,850 percent.
Translated into dollars and cents, for example, the tax alone on a
tin of snuff would increase from 3 cents to 97 cents. The tax on a
pouch of chewing tobacco would increase from 2 cents to $2.34.
The proposal is also a source of great consternation. In fact, I
question whether the White House understood or appreciated the
percp'^tage increases they were asking when they tried to equalize
the tax on cigarette and smokeless tobacco. The White House has
not explained its rationale for abandoning the proportional percent-
age approach between smokeless and cigarette tobacco advocated
by tax experts and adopted by past Congresses.
This traditional approach is well-reasoned and recognizes that
there is no relevant definition of equivalency between cigarettes
and smokeless tobacco products. The traditional approach recog-
nizes differences in weight due to the moisture of many smokeless
products, as compared with cigarette tobacco. It also recognizes dif-
ferences in the size and weight of packaging, differences due to
type and value added among various types of tobacco products.
This differential is further recognized between some smokeless
products, like snuff and chew. As such, the proportional approach
had a common sense rationale, tax equity and a degree of fairness
to it. By contrast, the rationale for the administration proposal is
In a recent letter, I asked the President if he was fully apprised
of the economic consequences of his recommendation on not only
the growers of my region and those who work at a processing plant
in Nashville, but also on the smokeless tobacco industry as a
In an industry with only $1.5 billion in total sales last year, it
is difficult to see how deterring use and presumably lowering sales
on the one hand, and raising taxes by these astronomical percent-
ages on the other, will lead to the $500 to $800 million in new reve-
nue. I am skeptical that these revenue targets can be reached, par-
ticularly if consumption declines.
Will further tax increases be necessary in later years? For the
average tobacco farmer in my district, the effect of the proposed tax
increase will be tremendous. One immediate impact will likely be
on whether the Department of Agriculture will be able to calculate
next year's tobacco quota. There is no experience on which to esti-
mate price elasticity of smokeless products.
A recent study assuming a 3 percent drop in consumption shows
that the projected aftertax price increases in snuff will reduce de-
mand by 2.63 million pounds, or 11.4 percent. Demand for chewing
tobacco is expected to be reduced by 1.32 million pounds, or 39 per-
cent, although the number of pounds used for cigar and pipe to-
bacco is small, the reductions are still 18 and 30 percent respec-
tively. Translating these reductions into lost farm value, farms
growing dark fire tobacco will lose between 6.3 and 10.4 percent of
value. Farms growing dark air-cured tobacco would lose between
18.9 and 31.8 percent of value.
If these proposed taxes were to become law, they would result in
a devastation of the farming community and the industry. The $45
million contributed by dark tobacco to the local Tennessee and
Kentucky economies will also decline. Jobs associated with the pro-
duction, marketing, processing and manufacturing of these prod-
ucts will be lost and tax revenues for States reduced.
More significantly, the administration's proposed tax increase
falls disproportionately on the Southern region of our country, as
Mr. Coble said. Farmers are concentrated in just four States â€” Ken-
tucky, Tennessee, Wisconsin and Pennsylvania â€” while the greatest
effect on disposable income is concentrated primarily in 12 States,
all in the South. In fact, consumers in the South would pay one-
half of the proposed tax increase.
Growers are as decent, hard working, law abiding as any people.
Growing tobacco is back-breaking, labor-intensive work. The people
who work in the manufacturing plants are similarly decent and
hard working, yet we look at these people as pariahs, purveyors of
a product which I might remind you is entirely legal.
For smokeless tobacco, we ask the committee simply to restore
fairness, reinstate the traditional proportional rate differential be-
tween smokeless products and cigarettes. The committee has wisely
used this approach in the past, and I hope you will use it here
should you include tobacco excise tax increases as a financing
mechanism for health care reform.
Thank you for the opportunity to share my views.
Mr. Payne. Thank you very much, Mr. Clement.
[The prepared statement follows:]
5TH DISTRICT, TENNESSEE:
STATEMENT OF REP. BOB CLEMENT OF TENNESSEE
HOUSE COMMITTEE ON WAYS AND MEANS
ON THE ADMINISTRATION'S PROPOSED HEALTH SECURITY ACT
NOVEMBER 18, 1993
MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE:
IT IS AN HONOR TO APPEAR BEFORE YOU AND I THANK YOU FOR THE
OPPORTUNITY TO SHARE MY VIEWS ON ONE ASPECT OF THE FINANCING
CONTAINED IN THE PRESIDENT'S HEALTH SECURITY ACT.
HEALTH CARE REFORM IS AN ISSUE OF UNPARALLELED IMPORTANCE TO
OUR FELLOW CITIZENS AND THE COMMITTEE'S HEARINGS ARE AN IMPORTANT
PART IN THE PROCESS OF FASHIONING A LEGISLATIVE PACKAGE THAT WILL
ADDRESS THEIR CONCERNS. AS THE PRESIDENT STATED IN HIS REMARKS
TO US IN STATUARY HALL, HEALTH CARE REFORM IS AN ESPECIALLY COM-
PLEX ISSUE AND ANY SOLUTION MUST BE APPROACHED WITH BOTH COMMON
SENSE AND FAIRNESS AS WELL AS VISION AND FAITH.
I THANK THE COMMITTEE FOR RAISING FOR DISCUSSION QUESTIONS
ABOUT THE FINANCING OF THE ADMINISTRATION'S REFORM PACKAGE. AND
I THANK YOU FOR ASKING, IN PARTICULAR, QUESTIONS ABOUT THE FAIR-
NESS OF THE EXCISE TAX INCREASES PROPOSED FOR TOBACCO PRODUCTS.
MUCH ATTENTION HAS BEEN FOCUSED ON THE PROPOSED 75 CENT IN-
CREASE IN THE FEDERAL EXCISE TAX ON CIGARETTES. INDEED, TOBACCO,
PARTICULARLY BURLEY TOBACCO, WAS THE NUMBER ONE CASH CROP IN THE
STATE OF TENNESSEE. RECEIVING LESS ATTENTION, BUT NO LESS ONER-
OUS OR IMPORTANT, IS THE PROPOSAL TO INCREASE THE EXCISE TAX ON
SMOKELESS TOBACCO PRODUCTS.
AS YOU MAY KNOW, I HAVE THE HONOR OF REPRESENTING IN CON-
GRESS NOT ONLY THE COUNTRY MUSIC CAPITAL OF THE WORLD, NASHVILLE,
TENNESSEE, BUT ALSO THE DARK FIRED AND DARK AIR CURED TOBACCO
CAPITAL OF THE WORLD - ROBERTSON COUNTY. I REPRESENT MORE THAN
2000 FARMS THAT GROW DARK TOBACCO AND THE REGION STRETCHING NORTH
AND WEST OF NASHVILLE INTO SOUTHERN KENTUCKY GROWS MORE OF THESE
TYPES OF TOBACCO THAN ANY OTHER PLACE IN THE WORLD. THESE TWO
TYPES OF TOBACCO ARE USED IN SMOKELESS PRODUCTS - SNUFF, CHEW,
PIPE TOBACCO AND CIGARS. SNUFF AND CHEWING TOBACCO ARE PRODUCED
IN A MANUFACTURING PLANT IN NASHVILLE THAT EMPLOYS 423 INDIVI-
DUALS. CONSEQUENTLY, ANY POLICY WHICH AFFECTS THE PRICE OR
AVAILABILITY OF SMOKELESS PRODUCTS IS A SOURCE OF GREAT CONCERN
TO ME AND MANY OF MY CONSTITUENTS.
AND BELIEVE YOU ME, THE PRESIDENT'S PROPOSAL TO INCREASE THE
TAX ON CHEWING TOBACCO BY 10,417 PERCENT, THE TAX ON SNUFF BY
3,472 PERCENT, THE TAX ON CIGARS BY 3,333 PERCENT AND THE TAX ON
PIPE TOBACCO BY 1,850 PERCENT, IS A SOURCE OF GREAT CONCERN. FOR
A WHILE, MY INITIAL REACTION TO THE PROPOSAL WAS THAT IT DID NOT
PASS WHAT WE IN NASHVILLE CALL THE "HEE-HAW" TEST. AND WITH ALL
DUE RESPECT TO MY FRIENDS AT THE NASHVILLE NETWORK, I KNOW THE
HEE HAW TEST AND, MR. CHAIRMAN, THIS PROPOSAL IS NO HEE HAW! IN
ALL SERIOUSNESS, THE PROPOSAL IS OF GREAT CONCERN. TRANSLATED
INTO DOLLARS AND CENTS, FOR EXAMPLE, THE TAX ALONE ON A TIN OF
SNUFF WOULD INCREASE FROM 3 CENTS TO 97 CENTS. THE TAX ON A
POUCH OF CHEWING TOBACCO WOULD INCREASE FROM 2 CENTS TO $2.34.
THE PROPOSAL IS ALSO A SOURCE OF GREAT CONSTERNATION FOR THE
WHITE HOUSE HAS NOT PROVIDED AN ADEQUATE EXPLANATION FOR ITS PRO-
POSAL. IN FACT, I QUESTION WHETHER THE WHITE HOUSE UNDERSTOOD OR
APPRECIATED THE PERCENTAGE INCREASES THEY WERE ASKING WHEN THEY
TRIED TO "EQUALIZE" THE TAX ON CIGARETTE AND SMOKELESS TOBACCO.
THE WHITE HOUSE HAS NOT EXPLAINED ITS RATIONALE FOR ABAN-
DONING THE PROPORTIONAL PERCENTAGE APPROACH BETWEEN SMOKELESS AND
CIGARETTE TOBACCO ADVOCATED BY TAX EXPERTS AND ADOPTED BY PAST
CONGRESSES. AS YOU KNOW, THIS WELL-REASONED TRADITIONAL APPROACH
RECOGNIZES THAT THERE IS NO RELEVANT DEFINITION OF EQUIVALENCY
BETWEEN CIGARETTES AND SMOKELESS TOBACCO PRODUCTS.
THE TRADITIONAL APPROACH RECOGNIZES DIFFERENCES IN WEIGHT
DUE TO THE MOISTURE OF MANY SMOKELESS PRODUCTS AS COMPARED WITH
CIGARETTE TOBACCO. IT ALSO RECOGNIZES DIFFERENCES IN THE SIZE
AND WEIGHT OF PACKAGING, DIFFERENCES DUE TO TYPE AND VALUE ADDED
AMONG VARIOUS TYPES OF TOBACCO PRODUCTS. THIS DIFFERENTIAL IS
FURTHER RECOGNIZED BETWEEN SOME SMOKELESS PRODUCTS, LIKE SNUFF
AND CHEW. AS SUCH, THE PROPORTIONAL APPROACH HAD A COMMON SENSE
RATIONALE, TAX EQUITY AND A DEGREE OF FAIRNESS TO IT. BY CON-
TRAST, THE UNDERLYING RATIONALE FOR THE ADMINISTRATION'S RECOM-
MENDATION IS NOT EVIDENT, UNLESS BEING PUNITIVE OR CONFISCATORY
IS THEIR RATIONALE.
SOME HAVE SUGGESTED THAT THE RATIONALE IS TO DETER UNDERAGE
INDIVIDUALS FROM USING CIGARETTES AND SMOKELESS PRODUCTS. IF
THIS IS INDEED THE PRESIDENT'S OBJECTIVE, IT IS ONE WE ALL SHARE.
BUT WOULDN'T ENFORCEMENT OF EXISTING FEDERAL AND STATE LAWS BE A
BETTER MECHANISM TO PREVENT SUCH SALES. I WOULD POINT OUT TO THE
COMMITTEE THAT RECENT HEALTH AND HUMAN SERVICES REPORTS SHOW THAT
USE BY UNDERAGE INDIVIDUALS DECLINED BETWEEN 1991 AND 1992.
ACCORDING TO AN HHS REPORT, "HEALTHY PEOPLE 2000 REVEIW, " THIS
DECREASING TREND IS APPROACHING AND VERY CLOSE TO THE YEAR 2000
GOAL OF 4 PERCENT USE BY INDIVIDUALS UNDER THE AGE OF 18.
IN A RECENT LETTER TO THE PRESIDENT, I ASKED IF HE WAS FULLY
APPRISED OF THE ECONOMIC CONSEQUENCES OF HIS RECOMMENDATION ON
NOT ONLY THE GROWERS OF MY REGION AND THOSE WHO WORK AT A PRO-
CESSING PLANT IN NASHVILLE, BUT ALSO ON THE SMOKELESS TOBACCO
INDUSTRY AS A WHOLE. IN AN INDUSTRY WITH ONLY $1.5 BILLION IN
TOTAL SALES LAST YEAR, IT IS DIFFICULT TO SEE HOW DETERRING USE,
AND PRESUMABLY LOWERING SALES, ON THE ONE HAND, AND RAISING TAXES
BY THESE ASTRONOMICAL PERCENTAGES ON THE OTHER, WILL LEAD TO THE
$500 TO $800 MILLION ANNUALLY IN NEW REVENUE WITHOUT SUBSTANTIAL-
LY DISRUPTING THE LIVES OF PEOPLE ASSOCIATED WITH SUCH A SMALL
INDUSTRY. I AM SKEPTICAL THAT THESE REVENUE TARGETS CAN BE
REACHED, PARTICULARLY IF CONSUMPTION DECLINES. WILL FURTHER TAX
INCREASES BE NECESSARY IN LATER YEARS?
FOR THE AVERAGE TOBACCO FARMER IN MY DISTRICT, THE EFFECT OF
THE PROPOSED TAX INCREASE WILL BE TREMENDOUS. ONE IMMEDIATE IM-
PACT WILL LIKELY BE ON WHETHER THE DEPARTMENT OF AGRICULTURE WILL
BE ABLE TO CALCULATE NEXT YEAR'S TOBACCO QUOTA. WILL SALES DE-
CLINE 3 PERCENT? 5 PERCENT? OR MORE OR LESS? THERE IS NO EX-
PERIENCE ON WHICH TO ESTIMATE PRICE ELASTICITY OF SMOKELESS PRO-
DUCTS. OVERESTIMATE THE CONSEQUENCE OF THE TAX INCREASE, AND
IMPORTS WILL GO UP TO MAKE-UP THE SHORTFALL IN DOMESTIC PRODUC-
TION. CURRENTLY, THE INDUSTRY PURCHASES OVER 99 PERCENT OF THE
DOMESTIC DARK TOBACCO GROWN. UNDERESTIMATE THE CONSEQUENCE AND
FARMERS WILL BE STUCK PAYING A NO-NET-COST ASSESSMENT AS EXCESS
TOBACCO ENDS UP IN THE POOLS. UNDER EITHER SCENARIO, OR SIMPLY
VIEWED FROM THE PERSPECTIVE OF DECLINING SALES, FAMILY FARM
INCOME IS LIKELY TO DECLINE.
A RECENT STUDY ASSUMING A 3 PERCENT DROP IN CONSUMPTION
SHOWS THAT THE PROJECTED AFTER -TAX PRICE INCREASES IN SNUFF WILL
REDUCE DEMAND BY 2.63 MILLION POUNDS OR 11.4 PERCENT. DEMAND FOR
CHEWING TOBACCO IS EXPECTED TO BE REDUCED BY 1.32 MILLON POUNDS
OR 39 PERCENT. ALTHOUGH THE NUMBER OF POUNDS USED FOR CIGAR AND
PIPE TOBACCO IS SMALLER, THE REDUCTIONS ARE STILL 18 AND 30 PER-
TRANSLATING THESE REDUCTIONS INTO LOST FARM VALUE, FARMS
GROWING DARK FIRE TOBACCO WOULD LOSE BETWEEN 6.3 AND 10.4 PERCENT
OF VALUE. FARMS GROWING DARK AIR CURED TOBACCO WOULD LOSE BE-
TWEEN 18.9 AND 31.8 PERCENT OF VALUE.
IF THESE PROPOSED TAXES WERE TO BECOME LAW, THEY WOULD RE-
SULT IN A DEVASTATION OF THE FARMING COMMUNITY AND THE INDUSTRY.
THE $45 MILLION CONTRIBUTED BY DARK TOBACCO TO THE LOCAL TENNES-
SEE AND KENTUCKY ECONOMIES WILL ALSO DECLINE. JOBS ASSOCIATED
WITH THE PRODUCTION, MARKETING, PROCESSING AND MANUFACTURING OF
THESE PRODUCTS WILL BE LOST AND TAX REVENUES FOR STATES REDUCED.
MORE SIGNIFICANTLY, THE ADMINISTRATION'S PROPOSED TAX IN-
CREASES FALL DISPROPORTIONATELY ON THE SOUTHERN REGION OF OUR
COUNTRY. FARMERS ARE CONCENTRATED IN JUST 4 STATES - KENTUCKY,
TENNESSEE, WISCONSIN AND PENNSYLVANIA, WHILE THE GREATEST EFFECT
ON DISPOSABLE INCOME IS CONCENTRATED PRIMARILY IN 12 STATES, ALL
IN THE SOUTH. IN FACT, CONSUMERS IN THE SOUTH WOULD PAY ONE HALF
OF THE PROPOSED TAX INCREASE.
WHICH ONE OF US WOULD WANT TO PLACE EITHER A REGION OF OUR
COUNTRY OR A SECTOR OF OUR ECONOMY WITH SUCH A BURDEN WHEN, IN-
DEED, IT IS ENTIRELY PREVENTABLE?
MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE, GROWERS ARE AS
DECENT, HARD-WORKING AND LAW-ABIDING AS ANY PEOPLE. GROWING
TOBACCO IS BACK-BREAKING, LABOR INTENSIVE WORK. THE PEOPLE WHO
WORK IN THE MANUFACTURING PLANTS ARE SIMILARLY DECENT AND HARD-
WORKING. YET WE LOOK AT THESE PEOPLE AS PARIAHS, PURVEYORS OF A
PRODUCT WHICH I MIGHT REMIND YOU IS ENTIRELY LEGAL.
MR. CHAIRMAN, I KNOW OTHERS WILL ADDRESS THE MANY OTHER
ISSUES THIS PROPOSAL RAISES, INCLUDING THE CONSEQUENCE ON STATES'
REVENUE SOURCES AND THE PRESUMED SOCIAL COST OF TOBACCO USE.
FOR SMOKELESS TOBACCO, WE ASK SIMPLY THE COMMITTEE TO RE-
STORE FAIRNESS. REINSTATE THE TRADITIONAL PROPORTIONAL RATE
DIFFERENTIAL BETWEEN SMOKELESS PRODUCTS AND CIGARETTES. THE
COMMITTEE HAS WISELY USED THIS APPROACH IN THE PAST AND I HOPE
YOU WILL USE IT HERE, SHOULD YOU INCLUDE TOBACCO EXCISE TAX
INCREASES AS A FINANCING MECHANISM FOR HEALTH CARE REFORM.
THANK YOU FOR THIS OPPORTUNITY TO SHARE WITH YOU MY VIEWS.
Mr. Payne. And now our next witness is Mr. Baesler of Ken-
STATEMENT OF HON. SCOTTY BAESLER, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF KENTUCKY
Mr. Baesler. Thank you very much, Mr. Chairman. I appreciate.
I have filed a more lengthy statement which I will ask to make a
part of the record.
Mr. Payne. Without objection.
Mr. Baesler. Thank you.
Mr. Chairman, just for a little background information necessary
to understand my testimony, I represent the 6th District of Ken-
tucky which is the number one burley producing district in the
world. Equally, I might be the only tobacco farmer in the House of
Representatives. I am not talking about leasing tobacco, I am not
talking about owning land. I am talking about actually working in
it every summer.
Today, my wife's in the barn stripping tobacco. And I mention
that because I think I have maybe a d&fferent perspective from
those who want to suggest that it is easy to get us out and let us
grow vegetables, for those that want to suggest that raising 75
cents tax won't really hurt us.
I know how it would hurt, not only hurt us, I know how it will
hurt the people, the five women we employ today. I know how it
will hurt the other temporary workers we have all summer, and I
know how it would hurt the small people from whom we lease on
their allotment so they can pay their taxes or pay whatever other
small bills they might have.
You have heard all the Price Waterhouse statistics today you
need to hear. And both of you gentlemen are from tobacco States
and you understand, so I am not going to repeat them. Conversa-
tion earlier from our colleague from California suggests that some
States are making great progress, whether it is North Carolina or
Kentucky. It was based on no facts whatsoever. Tobacco receipts in
Kentucky constitute 57.2 percent of all cash receipts.
In the 6th Congressional District alone, one out of five people
earns some family income by raising tobacco or leasing their
quotas. And that is important. All the conversation you hear about
give them a few pennies to buy their allotment, they will go home,
usually are said by people who have absolutely no understanding
of the tobacco culture.
Later today, you will hear Mattie Mack, who I think explains the
tobacco culture better than anybody I have ever heard, and had an
opportunity to hear a couple weeks ago. But they don't understand
that you just can't go buy the allotment of the farmer and take care
of the tobacco, take care of the people who depend upon it.
And that is why I want to emphasize the figure of one in five
have something to do with tobacco. The estimates of job loss you
have already heard^ but in Kentucky alone we are estimated to lose
some 30 â€” $50 to $90 million and 30 to 50 million pounds. Whv is
that important? We that raise the tobacco, and we that depend on
the farmer, we are on the lower end.
As you know, a lot of things go downhill. Well, this is going to
go downhill. Because we lose 50 toâ€” 30 to 50 million pounds of our
allotment, that with the 400-plus million pounds of import this
year, and 400-plus million pounds of import last year, and with a
fear that the market this year will result in another 150 to 175
million pounds in the pool, all together means those of us on the
lower end will receive no less than 10 percent cut in our quotas,
in hurley, and probably next year 20 to 25 percent.
What does that mean? Ten percent last year, 10 percent this
year, 25 percent next year, 45 percent or whatever it might be of
our ability to make money. We can't pass that on, we can't raise
our prices and say, OK, tobacco company, buy it. We can't say, OK,
consumer, we are going to raise the prices. We don't have that op-
So when you start talking about tobacco tax, we start talking
about don't worry about it decreasing consumption, and even as
suggested by our colleagues before, make it $2, don't worry about
it, we will run them out of business. The people we are going to
hurt most are those on the lower end and that is the farmer and
the people who only work for the farmer because that is the only
jobs they can get.
Now, enough said about tobacco. I am offended. I am offended be-
cause we have singled out â€” the President has singled out in his
package as the only sin tax to be used for funding for health care
is tobacco. Sure, it is politically appealing perhaps. It is politically
correct to pick on tobacco. But it is not equitable and it is not fair.
Now, having said that, I also strongly believe the health care sys-
tem needs to be improved. Kentuckians deserve it. They need ac-
cess to be affordable, quality health care. We all understand that.
And I am convinced and I will support, so everybody understands,
some tobacco tax to help pay for health care. I am not opposed to
that, provided it is equitable, provided it is fair, and provided we
make sure that this cost is not just shared or borne by a small seg-
ment of southeastern States. The current plan in no way makes it
Now, you have heard the conversation today from everybody
about the health risk. I am not here to argue about the health risks
today. I will use their figure. It costs $75 billion annually, tobacco
use costs $75 billion annually to the government. But let's be intel-
lectually honest here today. Smoking does pose health risks. But
that is true of a host of other products that are available in the
This presentation or this proposal, the people have used it, opted
to use political correctness as a policy tool to tax tobacco and ciga-
rette products, because it is easy, it is proper. But why have we not
opted to tax such products as distilled spirits, wine and beer? Do
they not contribute to our health care crisis? Of course, they do.
To argue that tobacco alone should bear the burden of underwrit-
ing the cost of health care is to miss the obvious price tag that our
society has paid and it is paying for alcohol use and abuse. It is
the height of arrogance and hypocrisy to fault and target tobacco
and ignore the truth about alcohol abuse. For example, a recent
study in the medical college of Wisconsin, more elderly Medicare
patients are hospitalized for alcohol abuse than for heart attacks.
So, Mr. Chairman, where is the moral and political outrage?
Where is the hue and cry for an increased tax on alcohol products?
76-304 -94 -9
Why haven't the health and medical costs associated with alcohol
use, misuse, and abuse become a political hot button? Why am I
talking about it? The administration says they need a certain
amount of money from sin taxes. Tobacco, as far as I am concerned,
tobacco will pav its share. But let's include that universe and bring
these other folks in who have similar statistics that I relate to you
as tobacco. We have talked about the economic cost of smoking.
The panel before us went over and over, $65 billion, $65 billion,
$65 billion. In 1990 alone, alcohol abuse accoimted for $99 billion
worth of costs in our economy.
But I don't hear any hue and cry about let's include it. I say go
get the tobacco folks, let's see, it is politically correct, jump on us,
both feet. Recent data shows that each year nearly 107,800 people,
deaths are directly attributed to alcohol. I have heard all the com-
ments about deaths related to tobacco. Isn't the 100,000 deaths
enough to talk about alcohol?
Alcohol is a contributing factor in almost half of all the homi-
cides, suicides, motor vehicle fatalities and numerous deaths were
liver disease. Over 40 percent of all traffic fatalities involve a
drunk driver. Each year, 534,000 people suffer injuries in nonfatal
alcohol -related crashes. How many of those people suffered those
Tobacco may be bad, but most of the time it is used volimtarily.
Unfortunately, with alcohol, most of the times the injuries are not
volimtary. Now, we heard a great deal of rhetoric about the impact
of secondhand tobacco smoke. But where is the outrage and con-
cern about prenatal alcohol exposure? It is one of the leading
known causes of mental retardation in our country.
The U.S. Department of Health and Human Resources estimated