On September 12th, 2008, in Dover, New Hampshire, Barack Obama stated “I can make a firm pledge: Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”
Repeatedly while on the campaign trial, Obama and Biden both stated that if you make less that $250,000 (or $200,000, or $150,000, depending on the day and the speech) you won’t see your taxes go up. Joe Biden said “No one making less than $250,000 under Barack Obama‘s plan will see one single penny of their tax raised, whether it’s their capital gains tax, their income tax, investment tax, any tax.”
Not any of your taxes. Not one single penny.
So perhaps Mr. Obama can explain how the new 62¢ tobacco tax — the largest tax increase on tobacco ever — isn’t a tax increase?
And the tax is disproportionately weighed to impact lower-income Americans. According to the AP, “A Gallup survey of 75,000 people last year fleshed out that conclusion. It found that 34 percent of respondents earning $6,000 to $12,000 were smokers, and the smoking rate consistently declined among people of higher income. Only 13 percent of people earning $90,000 or more were smokers.”
The six-dimes-and-two-pennies-per-pack tax is supposed to fund SCHIP, the State Children’s Health Insurance Program which is supposed to cover “poor” Americans. So all those evil smokers will be funding a good cause, right? Well, let us keep in mind some facts, such as that under this feel-good legislation for children, illegal aliens and children formerly covered under private insurance will be suckling at the government’s teat. And under SCHIP, “poor” is now defined as a family of four making $62,000 (which is 300% of the poverty line.) Still feel good about this tax hike? Well, if you don’t want your burgers and soft drinks taxed next, you might as well start buying packs even if you don’t smoke.
What does a cigarette tax have to do with burgers and cokes? Confused?
You see, we decided to use this marvelous invention called a calculator to figure out what would happen if 10 million pack-and-a-half-a-day smokers decided to just cut back to a pack a day. Half a pack a day equates into 31¢ per day of tax revenue lost. That equates into $113.15 per year in lost tax revenue, which is $1,131,500,000 of lost tax revenue per year if only 10 million smokers (a little more than 1/5 of the smokers in the U.S.) cut back by only half a pack per day. Many smokers have said they’re going to quit altogether. And when you wipe out over a billion dollars in tax revenue from an already-bloated program like SCHIP, that lost revenue has to come from somewhere.
[cue dramatic music] Enter the next wave of sin taxes: burgers and soft drinks.
Some local and state governments already have taxes on fast food and soft drinks. And so long as the federal government is spending money on healthcare for kids — who consume those evil burgers and soft drinks — then it only stands to reason that they’ll start taxing burgers and soft drinks next. (And any other food or beverage they deem “unhealthy”.) We don’t want smokers to smoke less… we can’t afford it! We need them to smoke more! And as a matter of fact, we need more smokers!
So whether you’re a smoker or not, be sure to buy your pack of smokes every day. And remember: you’re doing it for the children.