Posts Tagged ‘smoking’
Arizonans are smoking less, or rather, fewer Arizonans are smoking. Regular smokers fell from nearly 20% of the population to just under 16% – which amounts to about a 20% drop in smokers.
That’s good news. But it’s only one side of the story.
If there has been a 20% drop in smokers, then it would seem to me that there has been about a 20% drop in the revenues collected by those who smoke (or used to). Guess what? That is having an impact on our state budget – particularly health care funding.
So, what will the nanny-state do-gooders tax next to make up for lost revenue? Hope you aren’t addicted to soda!
In a cruel April Fool’s Day irony – that is NOT a joke — Obama has officially broken his pledge that no family making less than $250,000 would see a tax increase of any kind. Today marks the implementation of a new tobacco tax, which raises the federal take from $0.39 per pack to $1.01 – nearly 300%! The Wall Street Journal carries a great piece on this today.
Now, this is a tax that doesn’t affect most people. But, it does affect poor people at a higher percentage than rich people. It just so happens that more poor people smoke than rich people. Professor Brad Schiller sums it up best in his WSJ piece:
“I can make a firm pledge . . . no family making less than $250,000 a year will see any form of tax increase.” Remember that? It was Barack Obama, campaigning to become president last Sept. 12 in Dover, N.H.
Indeed, he promised repeatedly that 95% of American families would get a tax cut. So it’s especially fitting that he chose April Fools Day to implement his first tax increase — which will fall mostly on individuals and families who do not make anywhere near $250,000 per year.
Early in February, the president signed a law to triple the federal excise tax on cigarettes — which will jump from 39 cents per pack to $1.01 today. His administration projects this tax hike will bring in at least $38 billion over the next five years.
If you don’t smoke, maybe you don’t care. Maybe you even think a higher “sin tax” is a good thing. But health issues aren’t the only concern here. There are also questions of fairness, federalism, macroeconomic impact, and crime.
The fairness issue is particularly troubling. According to the Centers for Disease Control and Prevention, only one in five Americans smokes, so the excise targets a minority — and over half of all smokers are low income, and one of four are officially classified as poor.
Another irony in this is that the tax on cigarettes is going to be used to fund health care for poor kids, through a program called State Children’s Health Insurance Program (SCHIP). The tax won’t add enough revenue to cover the SCHIP, in order to do that, 22 million Americans would have to take up the habit, which is demonstrated nicely below. So the people hit the hardest by the tax are the parents of those who are supposed to get the benefit. Maybe it’s not a tax at all, it’s just a user fee.
“Thank You For Smoking” is a funny book (and later a movie) by Christopher Buckley (as in the son of William F. Buckley) about a tobacco lobbyist and the trials and turmoil that he must endure lobbying for “evil.” He even gets kidnapped and covered with nicotine patches, almost dies, but is actually saved because the years of smoking built up an immunity to nicotine, but then can never smoke again, because of the sensitivity. It’s funnier than that sounds, really.
However, as they say, truth is stranger than fiction.
Congress passed the SCHIP reauthorization bill last week. SCHIP stands for “State Children’s Health Insurance Program.” You know, it’s about the kids.
One of the problems with the bill, is that in order to fund the massive expansion, there is an increase in the tobacco tax. But, the amount of funding needed to pay for this expansion can’t be covered by the number of current smokers. In order to make up the shortfall, more than 22 million Americans would have to take up the habit!
With that in mind, this part of the Stimulus bill is particularly interesting:
$75 million for “smoking cessation activities”
So, last week we need 22 million people to start smoking “for the children.” This week we are going to use taxpayer money to try to get them to quit.
This is like a cheap dimestore horror story, but worse, because it is actually our own government at work. Instills a lot of confidence, huh?