Build Back Better taxes don’t stop at American shorelines

President Biden and Congress are currently in final negotiations of the “Build Back Better” package. Included in the original proposal is a substantial increase on federal taxes on tobacco products, notably cigars which, if passed, would devastate this economically vital and culturally intrinsic industry across Latin America. From seed to stick, cigars are a leading industry in Latin America and the key economic driver for regional stability in the Dominican Republic. As the former U.S. Ambassador to the Dominican Republic, I became aware of how the industry brought a secure livelihood for the citizens and a stable economy for the region.

Jobs and companies are tied to the cigar industry, bolstering both the agricultural and manufacturing sectors.

For hundreds of thousands of men and women in Latin America, the industry provides jobs in rural communities that offer regional stability and an opportunity for generational growth.

There are many U.S. domestic implications regarding this proposal. However, it is the consequences reaching shores around the region that we should focus on.

Whole percentage points of the annual GDP are tied to the cigar industry, and specifically its American marketplace.

The tax rates proposed in the “Build Back Better Act” could erode tens of thousands of agricultural and manufacturing jobs. This loss of opportunity would have far-reaching ramifications for the Dominican Republic as well as the U.S.

Vice President Kamala Harris has repeatedly said that economic stimulation in Latin America is vital to stop the curb of migration, thus a strong economy and jobs will provide a more stable and secure region.

However, the proposed taxes in “Build Back Better” run counter to this ideal and will ultimately threaten the livelihood of thousands, forcing many to migrate.

We have seen this scenario play out time and time again in countries across the region and the outcome is always the same — migration, which is what led to the current crisis at the U.S. southern border.

The Caribbean Basin and Latin America are vital partners for

U.S. foreign policy and are necessary strategic geopolitical allies. Inadvertently sentencing tens of thousands of our neighbors to poverty, directly caused by this tax, erodes America’s very interests in promoting and supporting strong democracies in Latin America.

This change in policy would condone creeping authoritarianism in the region and growing spheres of influence for global competitors like China.

In the most recent version of the “BBB,” congressional and administration negotiators dropped the tax from their proposal. I sincerely applaud this decision but caution against any attempt to revisit its inclusion as negotiations remain ongoing. If passed, there is no doubt this will create regional instability and crush local economies in Latin America. They must consider the ramifications the tax proposal will have on domestic and international strategic interests.

Mitigating immigration, strengthening diplomatic partnerships, and promoting democracy and economic prosperity are all important priorities for the U.S. Government. Let’s not undermine these priorities. The tax proposal must remain out of the “Build Back Better Act.”

Robin S. Bernstein was sworn in on July 3, 2018, as the U.S. Ambassador to the Dominican Republic and served until Jan. 20, 2021. Prior and subsequent to her diplomatic appointment, she has served as president and director of Richard S. Bernstein and Associates, Inc. and vice president of Rizbur, Inc., both of West Palm Beach.

By Robin S. Bernstein