A single paragraph added to Sen. Max Baucus’ (D-Mont.) highway bill, passed on Friday, may cost workers across America their jobs.
The addition to the highway bill came in the form of a back door method to raise taxes on small businesses, while also protecting corporate interests.
A new designation in the highway bill reclassifies roll-your-own tobacco shops as manufacturers and hits small business owners with high taxes, fees, and more regulations.
The tax loophole issue is aimed specifically at small businesses that allow customers to roll their own cigarettes by renting the use of a rolling machine. Since the tobacco is sold separately, consumers are not subject to the high sin-tax penalties on pre-manufactured cigarette products. The result is a discount on cigarettes for those willing to spend the time making their own smokes.
“Congress’ deficit-reduction Super-committee, which met in the fall, quietly looked at ways to raise revenue by closing the (tobacco) tax loophole,” according to the Washington Post.
The issue of closing tax loopholes to raise revenue goes against everything the Republican Party claims it has pledged to defend. It also violates the promise of job creation and protection for small businesses, who are the true job creators in America.
Therefore, if actions do indeed speak louder than words, than the Republicans who supported this bill are proving to be a masters of hypocrisy, inconsistency, and false claims designed to mislead the public.
Small business owner Phil Accordino builds machines for smoke-shop owners with customers who want to roll their own cigarettes. He employs dozens of workers across the country, who now face layoffs because of the new tobacco "loophole" designation.
Accordino told the Washington Post that “demand for his machines would dry up and he’d be forced out of business. Gone would be his new factory, which employs 35 workers in a corner of Ohio hit hard by steel mill closures.”
Baucus, who took $30,000 in PAC money from big tobacco company lobbyists, sided against small business owners and is effectively running them out of business, claiming they have an unfair advantage with a tax loophole.
The heart of this issue is not tobacco, but small business job creation and the implications of corruption for elected representatives, who only appear to represent the interests of those who give generously to their election campaigns.
Since Republicans are now voting to raise revenue by closing tax loopholes on small businesses, they should have no objection to raising taxes on big businesses in the exact same way.
What the business makes or sells is irrelevant. A tax is a tax, and a pledge is a pledge.
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