Increasing excise tax on cigarettes would harm convenience stores

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The economic recovery has been disappointingly slow for some. Few industries, if any, have been spared from the sluggish growth, hiring freezes, layoffs, and declining revenues that have been all too common over the past five years. However, lately, many businesses, both big and small, have seen their fortunes reverse as the economy appears to be turning around.

AS A MEMBER of the Georgia Association of Convenience Stores, I am keenly aware of the struggles that have faced businesses in our state since the onset of the recession. GACS represents more than 2,500 Georgia small businesses that provide jobs and affordable goods to the communities they serve. Convenience stores in Georgia have created more than 2,000 jobs between 2010 and 2012, and we need to ensure that there are no legislative or regulatory obstacles that could jeopardize continued job creation.

In spite of the difficulties we have faced and the progress we have made, we have learned that President Obama has proposed a 94-cent increase in the federal excise tax levied on cigarettes. If enacted, this tax increase would fund the $75 billion federally funded portion of a state-federal program that would expand access to early education.

We are highly supportive of state and federal measures that seek to improve education, but they should not be implemented
at the expense of jobs and economic activity. Choosing to fund the program with a tobacco tax increase could have negative implications for GACS members and conveniences stores across the nation.

Our member stores sell a variety of products, but tobacco products are undoubtedly one of their most important sources of revenue. According to the National Association of Convenience Stores, in-store sales of cigarettes account for nearly 40 percent of convenience store revenue nationwide. Any increase in the federal excise tax on tobacco products could cause a corresponding increase in black-market activity where tobacco products are cheaper because the appropriate taxes are lower or not collected at all.

THIS IS PROBLEMATIC because our members could lose the revenue they would have collected from not only from the sales of tobacco products, but also from the sales of the non-tobacco items – such as gas, coffee, or food items – that usually accompany these purchases. Cigarette tax increases could benefit illegal and counterfeit cigarette sellers while harming law-abiding retailers such as the ones GACS represents.

Our members are justified in their concern. In 2009, the federal excise tax on cigarettes increased from 39 cents to $1.01, and tax-paid sales of cigarettes declined by more than 8 percent. This is compared to an average decline of 3.8 percent per year over the previous 10 years. There are more than 66,000 individuals who work in the convenience-store industry in Georgia, plus thousands of
additional jobs provided by the direct suppliers to the same industry.

Convenience stores, like most retailers of consumer goods, sell products at very low margins. They are heavily dependent on sales volume to maintain their businesses and employment levels. As previously explained, a cigarette tax increase could diminish sales in multiple convenience store product categories. This decrease in revenue could cause convenience stores to cut employee hours or even lay them off.

AMID SO MUCH economic uncertainty, our leaders in Washington, D.C., should be careful to consider the consequences their decisions could have on small businesses and job creation. I encourage members of Congress, the Georgia delegation in particular, to work with President Obama to find a better way to fund this well-intentioned program – one that will not undo the hard-fought economic progress we have made.

(The writer is president of the Georgia Association of Convenience Stores.)

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deestafford
31720
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deestafford 01/05/14 - 12:37 am
6
1
The program Obama wants to fund...

The program Obama wants to fund, earlier childhood education, is not well intended. It is just another way to get children into government programs earlier. Every study conducted on Head Start and other like programs has shown after the third grade there is no difference in children who attended Head Start and those who did not.

Early childhood programs are baby sitting programs designed to take the place of education the children should be getting from their parents. In most cases the Head Start children are being raised by a single, unwed mother who is not working.

The earlier the statists can get their claws on the children, the sooner they can begin their indoctrination.

How many taxes must we bear because..."It's for the children"?

dahreese
4897
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dahreese 01/05/14 - 10:47 am
1
4
"Every study conducted on
Unpublished

"Every study conducted on Head Start and other like programs has shown after the third grade there is no difference in children who attended Head Start and those who did not."

Likewise studies have shown that as they grow older students who have attended summer sports camps are no better, and not as good as, the 'natural' athlete.

But that does not mean we should shut down these programs, academic or sports.

(I'd like to read any studies you have of your 'after the third grade.').
----------------------------------
Additionally, any tax increase on tobacco will hit all stores equally, not just convenience stores.

Bulldog
1333
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Bulldog 01/05/14 - 10:51 am
5
1
No redeeming value

Tobacco, unlike some other products, the misuse of which is normally considered questionable, has absolutely no socially redeeming value that I can see. Substantially increased taxes on tobacco, alcohol, THC, cocaine, opium, PCP and other compounds do any number of things, most of which are positive. And those which are negative, I for one, can live with. Any product that is taxed or whose supply is limited will experience a decrease in use and an increase in illegal production and/or distribution based on the amount of the tax increase/product availability. If the product has some genuinely positive value, these results are obviously considered negative. However, tobacco does not appear to have any socially redeeming value and I therefore have no problem with taxing it to the extreme. Crying about the loss of tobacco sales is very much akin to the crack dealer crying about his supplier going to jail. Unfortunately people are no longer free to do to themselves what ever they want. Since I now have to pay for their medical treatment, I want a bigger say in what they can do. Do what ever you want as long as you don't ask me to fix it.

Darby
29196
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Darby 01/05/14 - 11:23 am
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1
"How many taxes must we bear because...

"It's for the children"?"

.
"The children", as with "patriotism" are often the barricades behind which scoundrels operate in order to weaken our freedoms and raid the coffers of honest, hard working people.

I'm not that concerned about "convenience" stores. They will always find a way to survive. I am concerned about the categorical failure of education in the United States.

I'd vote to fix or even reduce economic support to all public schools until a mandate was in place to remove ALL educational requirements to teach anything of a politically biased or politically "correct" nature.

Our schools should NOT be used for indoctrination as is the case today.

About all American public schools do now, (with rare exceptions) is to produce dullard drones with minimum skill levels who can be counted on to support the status quo.

oldredneckman96
5115
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oldredneckman96 01/05/14 - 11:52 am
4
0
No real winner in this one.
Unpublished

I see no problem “harming” someone who would sell poison for profit. I do question the rational of taxing a poison to pay for a child’s program. This idea may sound great at first glance but fails the test when looked at in a long-term view. Once in place this program would depend on the poison for funds and thus would have to protect the poison. If you want to have a program for children, do so, if you want to remove a poison from public, do so, do not tie one to the other. When you remove a poison from public the money you will free up may just remove the need to tax the public to pay for someone’s childcare.

dahreese
4897
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dahreese 01/05/14 - 02:15 pm
2
2
"I'd vote to fix or even
Unpublished

"I'd vote to fix or even reduce economic support to all public schools until a mandate was in place to remove ALL educational requirements to teach anything of a politically biased or politically "correct" nature."

A nice ideal, I suppose, but we'd all have to agree on what's historically correct before we can get the politically correct worked out.

As to tobacco, I'm all for doing away with it period, but can the government afford to lose the tax?

And if the answer is 'No', then from where is the tax going to come?

I'm personally willing to cut the military budget (Let's do away with the private militaries hired by the Pentagon).

teaparty
11313
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teaparty 01/05/14 - 04:28 pm
4
2
"Likewise studies have shown
Unpublished

"Likewise studies have shown that as they grow older students who have attended summer sports camps are no better"
Most summer camps are paid for by the parents. The per-school, baby sitting, programs are paid for by the taxpayers, a very big difference.

KSL
143428
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KSL 01/05/14 - 05:47 pm
2
1
In 79 or 80, I audited a

In 79 or 80, I audited a course that the lib professor gave out studies. As far back as that, the study said that by high school, the money spent on that ill conceived HeadStart Program had disappeared.

Now it is by the Third grade? I don't doubt it.

KSL
143428
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KSL 01/05/14 - 06:03 pm
2
1
Oh yeah, dar

Athletic camps work. It's because the athletes want to better themselves. There is a huge difference when you are taking preschoolers out of the projects and trying to educate them. You made my point perfectly!

No amount of money spent with the best intentions is going to overcome conflicting, ongoing environments.

deestafford
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deestafford 01/05/14 - 06:11 pm
2
1
dahreese, I was off my two years on the time frame...

Dahreese, I was off my two years on the time frame and I apologize. It was at the end of the FIRST GRADE.

There was a study conceptualized during the Clinton administration and carried out by the HHS during the Clinton and the Bush administrations whereby two groups of children from the same area were chosen for the study. One group got into Head Start by being chosen by lottery and the other group was part of the ones not "winners" in the same lottery. After the first grade there was NO DIFFERENCE in the performance of those who had attended Head Start and those who did not. You can find the study at www.brookings.edu . Its title is "Is Head Start Working for American Students" by Grover J. "Russ" Whitehurst , dated Jan 21. 2010.

We are paying $7.235 Billion a year for a glorified baby sitting service for kids. The main thing that helps get children ready for an education are the parents and the home environment. It does not just stop in the early grades. It has to continue through high school. Parents MUST take responsibility for their children and not depend on the government doing their job.

Don't give me that BS about single mothers not having time. Just look at Dr. Ben Carson's life where he had a single mother (through divorce/abandonment) who work two and three jobs and reared two outstandingly successful sons. It's called desire and accepting responsibility. I suggest you read the book, "Gifted Hands" to see an example of caring parenting.

nocnoc
49121
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nocnoc 01/05/14 - 06:48 pm
4
1
Remembering the 90's to now

1990 - All we want is a Non-Smoking area. Its not like we going to ask you to smoke outside in the rain.
Smokers met them 1/2 and smokers were in the rain with 3 years.

1990 We are going to sue BIG Tobacco and use the money to care for all those people that have or will develop cancer.
$43 billion disappeared and never was seen again.

1992-201_ We are going to add another $____ tax to every pack of cigarettes and use this $$$$ to treat cancer victims and run PSA's.
$33+++ billion disappeared and never was seen again and more each year.

Jump 200)_
(Liberals)We are not going to legalize pot, we just want cancer patients and sick people to relax and build up their appetites and recover. Between 20 and 23 Millions people suddenly came down with illnesses that required POT prescriptions in 3 years.

2012
(Liberals)We're gonna Legalize POT to hell with Cancer.
America can now get stoned.

2013
Colorado and Calif, and Wash and Or. all start taxing Pot.

Yep!!!! Liberalism sure has come a long way.

corgimom
38280
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corgimom 01/05/14 - 07:04 pm
4
1
I am speaking now as somebody

I am speaking now as somebody that worked in a kindergarten for 6 1/2 years and as someone whose two granddaughters were in Pre-K.

I can tell you that it is extremely obvious to a kindergarten teacher who had preschool and who didn't. We can tell by Day 2.

But what is also extremely obvious is that kids who have problems, have those problems whether or not they were in Pre-K. Pre-k doesn't fix learning disabilities or low IQ or emotional problems.

For the kids who are smart, the Pre-K makes a huge difference. You can see how their academic success is helped so much by having Pre-K. My granddaughter tested out of kindergarten, because of the wonderful Pre-K class that she had. They wanted to put her in 1st grade, she was so far ahead. Starting this month, she will be in a 1st grade class part time because she is so far ahead of the others. And college readiness starts in elementary school, not high school.

What the studies really should say is this.

Despite all the "educators" best efforts, not everyone is supposed to do well in school. The kids that don't do well in Pre-k carry it forward. I don't know how much of it is nature versus nurture, but at this time, there is no way to raise someone's IQ by any significant difference.

The problem comes in is that they won't separate kids by abilities and they won't address problem children. The kids that we saw that had problems- there was very little that we could do. Help exists, but schools don't have enough money to implement it.

As each successive year goes by, the smart kids are left on their own while the teacher has to devote more and more time to the lagging kids. It slows the whole class down, but we can't hurt people's feelings by saying "your kid needs to be in special education".

The smart kids could do so much better if they would retain kids and put more kids in special ed, but now it's all about "feelings" and "self-esteem" instead of doing what's best.

Pre-k DOES help, it's what's done after that, that wipes out the gains.

CobaltGeorge
175282
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CobaltGeorge 01/05/14 - 08:50 pm
2
0
Darn, Darn, Darn

Would you believe it, I agree with corgimom, especially her last 3 major paragraphs.

That has been one of my main issue in our education system and have said that for years.

Upper Given.

itsanotherday1
48193
Points
itsanotherday1 01/05/14 - 08:57 pm
2
1
KSL

Back when the lottery first started funding pre-K was when I read the studies that said by third grade any gains made in pre-k were normalized.
I'm still convinced it is glorified daycare.

deestafford
31720
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deestafford 01/05/14 - 10:00 pm
3
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cogimom, You are so right.

cogimom, You are so right. However, the problem is not so much money as it is PC in that we cannot separate children into ability groups because it will hurt their "self esteem". When I was in grammar school in the fifties we would be separated into ability groups in reading and it never hurt out self esteem. ( Heck, we hadn't even heard of self esteem.) As a matter of fact, what it did do was to make us want to better and move up to the top group.

I don't know if it is still this way or not but at West Point every subject was separated by ability groups determined by daily graded exercises.

As far as disruptive students go, that is perhaps the largest impediment to a good teachers ability to help students who want to learn.

However, no matter how great a teacher maybe, it is nearly impossible to overcome poor circumstances of a not carrying home and culture.

TakeAHike
191
Points
TakeAHike 01/14/14 - 12:02 am
1
0
So what?

Tax on cigarettes is only $1? The tax on that societal nuisance should be 100%. Sorry convenience store president, no sympathy here for a business model heavily leveraged on a poisonous product that has absolutely no redeeming qualities. Why don't you just sell more useful products instead?

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