HB 3536 would impose unnecessary tax hike in the Lone Star State.
ATR president Grover Norquist sent the following letter to Texas legislators in opposition to HB 3536, legislation now pending before Gov. Perry that would impose a tax increase on tobacco products sold by companies that did not sign onto the Tobacco master settlement:
6 April 2013
Texas House of Representatives
P.O. Box 2910
Austin, Texas 78768-2910
I write today in opposition to House Bill 3536, which would impose new taxes on tobacco products from companies that did not sign the 46-state Master Settlement Agreement. As this bill stands, it would constitute a violation of the Taxpayer Protection Pledge, a written commitment that 55 Texas legislators made to their constituents to oppose any and all efforts to raise taxes.
A tax hike of any kind in the midst of current economic conditions is a bad idea. But an excise tax increase is particularly misguided, especially when Texas’s neighbors impose lower rates. Consumers would see the prices sky-rocket as manufacturers would be taxed at an even higher rate during production of each package.
As it is currently written, HB 3536 constitutes a tax increase and Pledge violation. However, this legislation could be amended in a way that would make it compliant with the Taxpayer Protection Pledge. If this legislation were amended to include offsetting tax relief that made the package as a whole revenue neutral, ATR would not consider it a violation of the Taxpayer Protection Pledge.
If you have any questions on this matter, please contact Patrick Gleason, Director of State Affairs, at (202)-785-0266 or firstname.lastname@example.org
Grover G. Norquist