So what is up with Congress and tobacco?
Today they want to give the FDA control over tobacco. One of the first things that will happen is they want certain things like a disclosure of the ingredients in cigarettes, they want bigger warnings, and they want to do away with flavored cigarettes. They also add a new tax.
When Congress put it's first tax on tobacco it was only 8 cents per pack of cigarettes. Back then the argument was it's a slippery slope. Just like now, when that argument is used it's everybody said no way, that will never happen, the taxes will not keep going up.
Since the first tax it has been increased 7 times. The biggest until now has been 10 cents. Congress just passed a 62 cent per pack tax increase on cigarettes. While the cause was good, to pay for children's health care (SCHIP) it makes you wonder what they were thinking.
During the campaign President Obama kept saying that no one who makes under $250,000 will see any tax increases of any kind.
"I can make a firm pledge," he said in Dover, N.H., on Sept. 12. "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." He repeatedly vowed "you will not see any of your taxes increase one single dime."
This got to be a common theme during the campaign, it even made it to the vice presidential debate when Joe Biden said
"No one making less than $250,000 under Barack Obama's plan will see one single penny of their tax raised," Joe Biden said, "whether it's their capital gains tax, their income tax, investment tax, any tax."
Okay, so we all know that people running for office say things that they don't mean and quite often couldn't do if they wanted to. While everyone really hung on to this one, let's just let it go as couldn't do it or he did it for a good cause. The real problem is that this is a tax on those who can least afford it.
A carton of cigarettes just went up over $6. In NY a pack now goes for over $11. The problem is only 13% of people making over $90k smoke. This is a tax on the lower economic people. What are they going to do? I believe that they are going to quit smoking.
Great, smoking is not good for them anyway. They can spend their money on better things. You can make all kinds of arguments like this, but you still haven't gotten to the big problem.
If all these people quit smoking, and I believe they will in record numbers, what happens to the to tax revenues? They go up in smoke. There goes the funding for SCHIP.
Congress in their wisdom decided to tax a product to pay for a program they wanted. What they did was destroy the product sells and the funding for their project. So now how are they going to fund SCHIP?
So during a major down turn in the economy Congress killed a major American industry which supports everybody from farmers to store clerks at your local 7-11. They raised taxes on a segment or the population that can least afford it. Mainly they have expanded a program that we will never be able to get rid of, so hold on to your wallet. Congress will come looking for more money to replace the lost cigarette tax.
BTW, roll your own tobacco tax went from a dollar a pound to over $24 per pound. You can't even afford to roll your own