Nice headline, Huh?
One that y'all are probably looking at and goin' "No shit, Sherlock".
And you'd be right.
If I was talking about the healthcare reform.
Which I'm not.
I'm talking about the newest extortion plan from the O-man's administration.
One that deals with that dreaded evil, tobacco.
Let's be clear here: I don't smoke.
Never have.
But the last I checked, tobacco was a legal product.
Heavily regulated, heavily taxed, but still legal.
And, billboarded with all of the possible lethal effects it can cause.
In fact, tobacco is the only legal product, that if used as directed, will kill you.
But that's not my point today.
The government continues to talk tough about the evils of tobacco.
The Centers for Disease Control and Prevention says cigarette smoking results in an estimated 443,000 premature deaths each year, and costs the economy $193 billion in health care expenses and lost time from work.
Damn, we can't have that!
What total, unmitigated, crap.
If the government were truly concerned about people's health, they'd outlaw the product completely.
Like they've done in the past with alcohol.
Or more recently, with three wheeled ATV's.
Or, with a bunch of pharmaceuticals that didn't quite turn out as the FDA expected.
But they won't.
If the government were truly concerned about people's health, they'd outlaw the product completely.
Like they've done in the past with alcohol.
Or more recently, with three wheeled ATV's.
Or, with a bunch of pharmaceuticals that didn't quite turn out as the FDA expected.
But they won't.
You see, smokers vote.
And tobacco generates revenue.
So, they won't outlaw tobacco, but they tax it.
Heavily.
Heavily.
They couch their taxation schemes in the cloak of public health.... in the idea that they're trying to curb smoking for your own good.
Because, you see, tobacco is addictive.
Especially to the government.
"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 last year to implement his first tax increase -- which falls 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 -- from 39 cents per pack to $1.01 .
His administration projects this tax hike will bring in at least $38 billion over the next five years.
You see, every one dollar tax on a pack of cigarettes raises about $9 billion a year for whoever implements the tax, federal or state governments.
That's right, $9 billion for every $1 per pack.
Per year.
Even worse was what they did to the tax on cigars when the O-man took office: cigar and bulk tobacco taxes were capped at 4.9 cents per cigar until the O-man raised the cap on them to 40.26 cents per cigar earlier this year.
Congress passed legislation in 2007 raising the tax to fund the State Children's Health Insurance Program, but former president George W. Bush vetoed it, saying it would not have the desired effect of improving the healthcare of smokers.
In February, President Obama, who has struggled to quit smoking, signed a new version.
That major "tax increase on cigarettes, smokeless tobacco and cigars will fund a $32.8 billion expansion of the State Children's Health Insurance Program, providing coverage to an additional 4 million children" said the O-man at the bill's signing.
That children's healthcare program is SCHIP, the first stage of the O-man's vaunted government healthcare program.
But wait.
The O-man has long been a big proponent of helping the little guy and taxing the rich.
His whole candidacy and election was based on helping the poor and sticking it to the rich.
Ooops.
Not only are the payers of cigarette taxes poorer as a group than the payers of other taxes, but there are fewer of them.
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.The burden on the lowest-earning 20 percent of households from a cigarette tax is 37 times heavier than if the government raised the money with the federal income tax.
So by raising the tobacco tax, he zapped not only the poor, but the elderly, two groups he claims to champion.
And did nothing to improve their health or their healthcare.
Instead, he took the taxes they will now pay and redirected them to children's health.
Funding a pet program on the backs of a small, poor, elderly, and politically unpopular segment of the population: smokers.
Now the administration is considering raising cigarette taxes yet again, perhaps by as much as another dollar per pack, to fund increased government spending.
Just because the government needs revenue to fund some general spending program that has broad benefits doesn't mean that an arbitrarily selected group of people should pay the tax.
Popular, expensive, broadly available public programs should be paid for with broad-based taxes on income or consumption.
Nobel economist Gary Becker pegs the long-run price elasticity of demand for cigarettes at 0.8 -- i.e., a 10% increase in price causes an 8% decline in unit sales.
He projects that a $1 a pack cigarette tax would prompt 1.2 million adult smokers to quit.
The Obama tax hike translates into a 13.3% increase in the average pack price.
That implies a 10.6% decline in unit sales per year.
None of this is good for the economy.
Consumers are already having a tough time making ends meet.
Burdening them with a new $38 billion tax isn't going to help create jobs.
Estimates by the National Association of Tobacco Outlets of the job losses in cigarette manufacturing and distribution alone will exceed 100,000 for each one dollar per pack price increase.
But here's the real problem: as governments continue to build dependency on revenues generated from tobacco taxes, and as tobacco consumption continues to fall, a crash will follow just as certainly as a heroin addict who can't get his fix.
As much trouble as teh O-man has said he's had quitting tobacco, he'll have an even tougher time quitting tobacco revenues.
“The primary requisite for any new tax law is for it to exempt enough voters to win the next election.” ---- Will Rogers
“We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle” ---- Winston Churchill
“The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.” ---- Jean Baptiste Colbert
