On September 12, 2008, Barack Obama was in Dover, New Hampshire, on the campaign trail.
He was talking taxes and he made a promise, a "firm pledge."
BARACK OBAMA: And 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.
Read Obama's lips: NO FAMILY MAKING LESS THAN $250,000 A YEAR WILL SEE ANY FORM OF TAX INCREASE.
He lied.
On February 4, 2009, the new president signed a bill expanding the State Children's Health Insurance Program (SCHIP), and increasing the federal excise tax on tobacco by a massive 156 percent.
It's not just the feds that are increasing taxes on tobacco products. Here in Wisconsin, Gov. Jim Doyle's proposed budget would slap an additional 75 cent per pack increase in the state cigarette tax.
Remember, Doyle said: "Going forward, my mind will be open to every solution -- except one. We should not -- we must not -- and I will not -- raise taxes."
Yeah, right.
Obviously, Obama broke his promise about families making less than $250,000 a year not seeing ANY FORM of tax increase.
Amanda Carpenter writes:
55 percent of smokers are considered "working poor" and one in four live below the poverty line.
Aside from the fact that this tax disproportionately hits poorer Americans, the tax doesn't make fiscal sense.
From the Wall Street Journal:
Congress is moving so fast and furious that it's impossible to keep up. But we didn't want to miss telling you about the tax increase on the poor and middle class that Congress is about to pass without a whit of media attention.
We mean the tax increase on smokers that is part of the new children's health-care subsidy bill. To finance this $73 billion entitlement expansion over 10 years, the bill imposes an additional federal tax of 61 cents per cigarette pack, from 39 cents today. According to the Bureau of Economic Analysis, 96% of America's 25 million smokers make less than $150,000 a year. The Tax Foundation estimates that 99% of the smokers who will pay the new tax make less than $250,000, which is the income below which President Obama promised would see no tax increase.
...The number of smokers keeps falling, but health-care costs keep rising. So paying for the biggest new health-care expansion in years with a declining revenue source is a guarantee of future red ink that will increase pressure for higher income taxes too. Just ask the politicians in Maryland, who doubled their cigarette tax two years ago to finance a new health-care program. That has led to 25% less tobacco revenue than expected because of declining sales, so the program is already in the red after its first year. But hey, it's the thought that counts.
In sum, Obama claimed to be the champion of low and middle income Americans. Obviously, the promises he made on the campaign trail were empty.
Bottom line: Funding this massive health care expansion with a federal excise tax on tobacco, a declining revenue source, is guaranteed to fail.
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Stop-smoking lines flooded as tobacco tax rises
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Here's more on the fiscal nonsense of depending on a tobacco tax to fund the SCHIP expansion:
22 Million New Smokers Needed: Funding SCHIP Expansion with a Tobacco Tax
3 comments:
Not only does this not make no fiscal sense. I would conjector that we will see significant increases in theft, robberies and illegal sales by third parties of all kinds of tobacco product hit with this blatant attack on the lower and middle class smokers of this country. I for one am looking at any legal options I have as a citizen to not support this effort in anyway with my hard earned money. SO SAD that our politics continues to create economic inequity under the guise of helping those same folks.
David in Texas: Mad and Unhappy and I won't take this anymore!!
You're right. This tax is guaranteeing a tobacco black market.
your all kidding right? lets be clear about this particular tax increase (yes i am a smoker) - first this is not an imposed tax per se as we are all free to not pay it - simply put down the smokes - we are "as smokers" currently subsidized by many others - consider the data regarding smoker health - #days of illness etc - out more often from work - heavier burdons on health care system - albeit we do die earlier so their is bonus for the social security system - as for the "working" poor - you mean we should keep cigarrettes cheap for them...perhaps encourage them to smoke more...smoke up johnny it will do you a world of good and here is a bottle of booze for good measure - come on everyone - no doubt we all wish we could avoid paying unnecessary taxes - still you think it bad policy to tax the smokers and drinkers of the world - versus say those that by food or clothing - not like these are basic needs being met but rather our vices (tastie ones at that but nevertheless vices) - frankly if the "poor" workers of the world are spending hard earned dollars on smokes - perhaps the tax will motivate them to keep more of their money in their pocket but not smoking - as a matter of public policy it seem reasonable to discourage people form smoking - afterall shouldnt we impose certain standards on folks - like say get your kids vaccinated (matter of public policy - for the good of the whole) - it is not a "you cannot" but rather payup for those sticks. But hey i would be in favor of leveling taxes on other vices as well - say capital gains = income tax; or excise taxes for luxuary items that reflect their value/cost; i am sure we could come up with many - so perhaps the real frustration here is that smokers are again asked to pony up loot and it seem there continues to be inequity in how taxes are leved - that is a fair - and yes we should be asking others with similar "vices" to pay to play as well.
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