It should at least be mentioned, don’t you think?
From Dow-Jones, “House Passes Children’s Health Expansion; Obama Signature Awaits“:
The SCHIP expansion would cost some $32.8 billion over five years, according to the the non-partisan Congressional Budget Office. The bill is financed by an increase in tobacco taxes, including a 61-cent-per-pack increase in cigarette taxes that would raise the federal excise tax on a pack of cigarettes to $1.
Analysts expect the higher taxes on tobacco to reduce revenues at the three major U.S. cigarette makers, Altria Group Inc. (MO), Reynolds American Inc. ( RAI) and Lorillard Inc. (LO).
- Associated Press, GOP leaders criticize Ark. gov’s tobacco tax plan
- Richmond Times-Dispatch, “Panel rejects bid to double cigarette tax”
- Beaver County Times, “Up to snuff: Lawmakers must OK Rendell’s tax proposals on tobacco products“
At a certain point, tobacco’s just going to run out of its revenue potential. The demand curve is NOT perfectly inelastic.
States will then move on. You know, like in New York, with Governor Paterson.
It seemed like a good idea at the time. Last week, a New Hampshire legislator proposed a $25-a-head tax on horses. It’s not such a crazy idea. Dogs are taxed, through licenses. This proposal never left the gate, however, trampled by irate nag owners in the tax-free-or-die Granite State.
With government revenues hobbled, cities and states are dreaming up ever more exotic excise taxes, which are targeted taxes on goods rather than on income. Chicago has a now-famous bottled water tax. Ski lift tickets, veterinary bills, and tattoos are entering the realm of taxable commodities. You may remember we fought a revolution over the question of the state’s right to impose such taxes. Maybe we will again.
That’s an excellent column by Alex Beam at the Boston Globe, “They Tax Horses, Don’t They?“
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