Don't raise consumer taxes to pay for federal infrastructure bill

West Virginians know what it means to help one another, especially when times get tough. This has been particularly true over the past year when we were forced to stay apart but were still able to keep our communities strong. Despite our best efforts, some of our most vulnerable West Virginians have been impacted especially hard during the pandemic. As our state and nation look towards economic recovery, we must move forward on a path that is fiscally responsible; that includes Democrats in the White House and Congress keeping their promise to low-income West Virginians. No new tax increases.

Right now, in the nation’s capital, West Virginia senators Joe Manchin, D-W.Va., and Shelley Moore Capito, R-W.Va., have been working a $1.2 trillion infrastructure deal that would bring thousands of jobs and much-needed funding to many communities in West Virginia. Despite their best efforts, the rest of the Democrats in Washington are looking to pass a budget reconciliation package that includes another $3.5 trillion in spending that would be, in part, paid for by more taxes on consumer goods. Much of this package doesn’t deal with actual infrastructure but instead campaign promises pushed by liberal interest groups.

Both Democrats and Republicans have been going back and forth with ideas trying to figure out how to pay for it. One idea that should be avoided is an increase to taxes on consumer goods such as gasoline, sales, alcohol and tobacco. These taxes are often regressive, as nearly three-fourths of all smokers are from lower-income backgrounds. An increase in the gas tax would hurt almost every West Virginian as the majority of our workforce uses a vehicle to get to and from work, school and church. These taxes hit low- to middle-income workers the hardest and would have a devastating effect on our poorest communities in West Virginia. Why should we be the ones to foot a $3.5 trillion bill especially if that’s on the backs of low-income West Virginians?

Additionally, these increases would have grave economic consequences on our local convenience stores and other small businesses. For example, raising these consumer taxes would increase burdens on these businesses who largely survived the pandemic on sales of products such as tobacco. For many of these businesses, nearly 35% of their revenue comes from these types of products. Even just isolating taxes on one product could have lasting negative effects such as we saw in Minnesota, whose convenience stores lost $38 million in non-tobacco revenue and an estimated 1,100 jobs with an increase to their tobacco tax. If Democrats in Washington raise consumer taxes, the expected outcome seems obvious: more failed businesses and more unemployed West Virginians.

Throughout his campaign, President Biden relentlessly promised that he wouldn’t raise taxes on anyone making less than $400,000. The president should remember that promise and recognize the fact that an increase on consumer tax is a tax increase on our most vulnerable West Virginia residents. We know senators Manchin and Capito are working hard to pass a historic infrastructure bill that will bring relief to West Virginians and help some crawl out of economic hardships caused by the pandemic. However, using an increase in taxes on consumer goods to pay for the partisan budget reconciliation package actively threatens to counteract that relief and limits the good we can do for our most disadvantaged West Virginians.

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Originally published in the Herald Dispatch:

https://www.herald-dispatch.com/opinion/kent-a-leonhardt-dont-raise-consumer-taxes-to-pay-for-federal-infrastructure-bill/article_5ae55f1a-0072-50e8-b7f4-132a943ba735.html