Tobacco tax tsunami is drowning small businesses

Let’s be clear. Mayor Rahm Emanuel’s proposed tobacco tax — which is likely to be voted on March 16 by the City Council — has nothing to do with keeping kids away from with smoking. If that were the case, he would have simply raised the minimum age to purchase to 21. Instead, he is using tobacco to mask an unprecedented move into government control of consumer goods pricing.

The City of Chicago’s unprecedented overreach into the free market by proposing to mandate the minimum price of tobacco products, paired with an effort to raise another $6 million through additional taxes on cigars and smokeless tobacco, is raising the ire of local businesses and aldermen alike.

In just the last two years, retailers that sell tobacco have been constantly targeted by this administration. First, the cigarette tax was increased, giving Chicago the highest tax in the

nation. Next, Chicago banned the sale of menthol cigarettes within 500 feet of a school, without

ever proving that there was a correlation between higher rates of smoking among children and schools within 500 feet of a retail tobacco location. This law has forced 400 retailers in the city to pull the product off of their shelves. To make matters worse, retailers that had been at their location for many years were impacted. No consideration was given for those businesses, their employees or their customers. No consideration was given for the taxpayers who must pick up the lost revenue through higher taxes and fees in other areas.

At the beginning of this year, Chicago instituted the highest vaping tax in the nation. And just two months later, the mayor is back asking for more tobacco taxes and regulations. The mayor says that he is going after “big tobacco,” but it’s the city’s small businesses that are being hurt the most, followed by neighborhoods on the South and West sides that have experienced an uptick in crime as a result of these policies. And let’s not forget about the border wards, which have the hardest time attracting and retaining businesses that are often lured to the business-friendly suburbs.

“Big tobacco” doesn’t lose sales. That’s a myth. Unlike small retailers, they don’t have problems selling their businesses because the tobacco taxes have made them unprofitable. They don’t have banks refusing to give them loans. Yet those are the issues facing Chicago’s small businesses as a result of these policies.

Mayor Emanuel has decided to embark on a new mission to move beyond taxation and into setting minimum prices for products. How long before he thinks it’s a good idea to set prices for soda, alcohol, potato chips, or any other product he randomly deems to be not good for you?

This is not about protecting the “youth” from “big tobacco.” This is about how Chicago’s small businesses and poorest neighborhoods have continued to suffer at the hands of these heavy-handed, short-sighted and misguided tobacco policies. Mayor Emanuel has shifted from wanting to regulate businesses to running them. Maybe employers should just hand him the keys.

We hope that on March 16, the aldermen will take a stand against this unprecedented

government overreach and stand up for small business owners, their employees, and Chicago

consumers.

Rob Karr is the president/CEO, Illinois Retail Merchants Association, which represents more than 23,000 stores from the nation’s largest retailers to small independent businesses.

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