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Snuffing Out Small Business

A smoke shop in rural Michigan is just one example of how Covid policies have destroyed the most vulnerable layer of our economy.

“It’s killing me,” Darlene Webb tells me.

She and her husband Jon are the owners and proprietors of J.R. Smoke Shop in Hillsdale, Michigan. For the American right’s young best and brightest, their store is iconic; a favorite of the small town’s blue-collar natives, Darlene also caters to the professors and students at Hillsdale College.

But not for much longer.

Just before Christmas in 2019, President Trump signed legislation raising the smoking age to 21. With the stroke of a pen, half the Hillsdale student body was no longer able to buy pipe tobacco and cigars. Thus ended a hallowed undergraduate tradition—and a huge bite was taken out of J.R. Smoke Shop’s business.

Then Covid-19 hit, and Gretchen Whitmer (“our wonderful governor”) shut down the state. Darlene and Jon were forced out of business for over a month.

Eventually, J.R. Smoke Shop was allowed to open. But that wasn’t the end of their troubles.

Generous Covid benefits for the “unemployed” meant Darlene’s suppliers were struggling to transport their product. Even Big Tobacco can’t find people to work in its warehouses or to drive its trucks.

So, Darlene can’t get stock. Even if she could, there’s no one to help them run the shop. “Covid shut everything down, and now nobody wants to work because they make more on handouts,” Darlene says with a sigh.

Then came the final blow. Earlier this month, the Biden administration announced plans for astronomical tax-hikes on tobacco. The rate will double for cigarettes, while pipe smokers will have to fork out an extra 1,600 percent. (Yes: that’s one thousand, six hundred percent.)

Darlene and Jon plan on closing their store when their lease expires in May. They want to do business, but they can’t. Joe Biden and Gretchen Whitmer won’t get out of their way.

What’s maddening is that Biden isn’t trying to get people to stop smoking. On the contrary. These new taxes are supposed to help fund the extra $4 trillion in spending in the Democrats’ 2022 budget. Even by his critics’ estimates, Biden’s new taxes will add over $10 billion a year in revenue.

In other words, Democrats are praying that smokers won’t quit.

Still, $10 billion is hardly a drop in the $4 trillion bucket. And if those funds are being turned into Biden Bucks that incentivize unemployment, they’re bound to make things worse. These “Covid relief efforts” have started a domino effect that spells doom for the American economy.

If government offers more handouts, fewer people will look for jobs.

If fewer people look for jobs, vacancies won’t be filled.

If employers can’t fill vacancies, they’ll have to close down their businesses.

If businesses close down, the few workers remaining will lose their jobs.

If workers lose their jobs, the government will need to offer more handouts.

The cycle will repeat itself over and over, until the U.S. Treasury runs out of cash and we have to lease the White House to Jeff Bezos or the lizard-people who run Pfizer.

What’s even more unfortunate is that this tax is being levied disproportionately on low-income Americans. According to the anti-smoking lobby’s figures, over 30 percent of American smokers live below the poverty line. For comparison, only about 10 percent earn $100,000 or more a year.

Consider, too: It’s an open secret that the most popular “pipe tobaccos” by far, like Gambler and Good Stuff, are for folks who roll their own cigarettes. (Most pipe tobaccos don’t come in menthol.) They only call themselves “pipe tobacco” to avoid the higher tax rate on cigarettes.

Trust me, though, it’s not very tasty. You’d only smoke Gambler if you couldn’t afford Camels. That’s why the government has always turned a blind eye to this loophole. This isn’t fine English cavendish we’re talking about. It’s bottom-of-the-barrel Chinese scrub.

Darlene and Jon estimate that these “pipe tobaccos” make up about 40 percent of their business. The other 60 percent is divided between cigarettes, cigars, and actual pipe tobaccos. So it’s not the Hillsdale professors in tweed jackets and horn-rimmed glasses being targeted by the 1,600 percent pipe tobacco tax. It’s the very lowest wrung of America’s socioeconomic ladder.

That’s President Biden’s plan, then. He’s going to save the American working class by raising their taxes, killing their jobs, and then putting them on welfare.

Makes sense, right? Of course it doesn’t.

Look: I’m not going to shed a tear for the Burger King that has to close at 9 p.m. because they can’t find someone to work the overnight shift for minimum wage. If Covid kills those bullshit jobs, bury them in a shallow grave.

But Biden’s tobacco levy is different. It seems designed specifically to kill small businesses and hurt blue-collar families.

About thirty minutes from Hillsdale is the town of Coldwater, Michigan. Coldwater is home to the region’s Walmart Distribution Center, which is hiring warehouse associates. They’re offering $28.50 an hour plus a $5,000 sign-on bonus. That’s over $60,000 a year.

Like J.R. Smoke Shop, they’re desperate for workers. But if Biden is offering folks money not to work, even Walmart can’t compete. Darlene and Jon never stood a chance.

Michael Warren Davis is the author of  The Reactionary Mind(Regnery, 2021) and did not attend Hillsdale College. Read more at his blog, North of Boston.

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