Among the many motes, this item caught our eye: $1.25 tax increase per pack of cigarettes.
But isn’t Congress also considering a hike in the tobacco tax to fund children’s health insurance, enough to cover kids up to 5,000 percent of the poverty level, or whatever the latest figure is? Why yes, it’s a 61 cent per pack increase in the federal tobacco tax as proposed in the Senate SCHIP plan.
And as a matter of fact, tobacco just keeps getting hit again and again. Nineteen states raised taxes in 2002, 14 states in 2003. In Texas, the per pack state tax went up by $1 at the start of the year.
The Star-Telegram reporter interviewed a local smoker, Ramzy Sharif, who observed, “I just don’t understand why it’s getting to the point where [smokers] are almost being discriminated against…It’s kind of like we’re being ostracized for smoking.” Ya think?
We know that tobacco demand is elastic, but sooner or later, something’s going to snap. And then the advocates for expanding government programs will look somewhere else for their revenues.
UPDATE (3:20 p.m.): D.C. writer David Hogberg draws an historical analogy between the new $10 luxury tax on cigars and the short-lived luxury tax (yachts, watches, furs) of the early 1990s. Turned out the tax’s big success was destroying jobs in the affected industries. Smart piece by Hogberg, “Emptying the Humidor.”
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