Not an April Fools Day joke: Obama tax hike hits today

posted at 3:05 pm on April 1, 2009 by Ed Morrissey

And the AP notices that it didn’t target the top 5% of earners, either.  The cigarette tax increase that pays for S-CHIP takes effect today, and it will hit working class families the hardest.  In fact, AP reporter Calvin Woodward sounds downright offended (via Jim Geraghty):

One of President Barack Obama’s campaign pledges on taxes went up in puffs of smoke Wednesday.

The largest increase in tobacco taxes took effect despite Obama’s promise not to raise taxes of any kind on families earning under $250,000 or individuals under $200,000.

This is one tax that disproportionately affects the poor, who are more likely to smoke than the rich.

To be sure, Obama’s tax promises in last year’s campaign were most often made in the context of income taxes. Not always.

“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.”

Some of the people in the populist class took notice, too.  Smoking cessation hotlines are having a banner week in traffic:

Calling your state stop-smoking hot line for help kicking the habit? Expect a wait: Smokers are flooding the lines in a panic over an increase in the tobacco tax.

Denver-based National Jewish Health received triple the usual number of calls Monday for a March day to quit lines it runs in six states: Colorado, Idaho, Iowa, Montana, New Mexico and Ohio.

The calls — 2,317 on Monday — had steadily increased all month as smokers began dealing with a big price hit in a sour economy. Not only does the per-pack federal tax climb from 39 cents to $1.01 on Wednesday, but the major cigarette makers raised prices several weeks ago in anticipation.

If Woodward is offended now, just wait until Barack Obama gets his cap-and-trade system passed in Congress, although he may have to wait until 2011 to get it.  The increase in “fees” charged to energy producers will hit the lowest income earners the hardest as energy costs will skyrocket.  It will eat up the disposable income of working-class families, some of whom may have to choose between heat and food in winter, thanks to the decrease in production and the rise in prices as producers pass along costs to the consumer.

Tomorrow, I’ll be talking with former Rep. Dick Armey about the cigarette taxes and their regressive impact on Americans.  Is this the Hope and Change Obama promised?  Tune in and find out!


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

Comment pages: 1 2 3

Hey I know!

There’s tons of StarBucks around the country, heck, even our small town of 40,000 just opened up their 4th store.

Everybody must drink coffee!

Why don’t we put a $1.00 tax on a cup of coffee and think of all the money we could bring in!

:-P

RedbonePro on April 2, 2009 at 4:01 PM

Funny I was thinking Obama is a 4 year April Fools joke!

Equally funny how the ‘tards rant about a national sales tax being regressive yet are strangely silent on cap-n-trade.

jdkchem on April 2, 2009 at 6:45 PM

Aside from being a tax on the poor, this is the type of tax that cannot be used to fund something different. If you tax smoking, fewer people will smoke, and cigarette revenues will go down. When that happens, you won’t have as much revenue as initially predicated, and you won’t be able to fund a SCHIP expansion.

Never presume malice when stupidity is a viable option… so which is it? Stupidity or a desire to ruin America?

Roxeanne de Luca on April 2, 2009 at 7:30 PM

The whole point of putting an extra tax on cigarettes is for revenue and NOT to correct people’s bad habits.

Remember the windfall profits the states got as a result of the class action lawsuit against Big Tobacco back in the 90′s? Where was the money supposed to go? To schools, smoking cessation programs, health care, et al right? Well, what happened when they started running out of that money? They started drives to tax more on cigarettes to save our children’s education and the like did they not? So there was an effective double-tax implemented as a result. One when the tobacco companies were sued (they had to pass the price of that to the consumer) and one after the settlement money was burned through by the government.Well, guess what, when more smokers either give up the habit (which is always a good thing but a purely private choice) or go to the black market to get their nicotine fix; what’s going to happen to the tax revenue. It’s going to go D-O-W-N! At that point, all this money that is going to the government coffers now, will diminish and will need to be replenished by guess what…. ANOTHER TAX!!! On what you ask? It’s the government, they’ll find something wrong with something else that affects something in your body that you obviously have no way of controlling your consumption with your own free will. That new tax will be used to cover the shortcomings of the previous tax it took the place of. Then once that tax runs its course, there’ll be another one after that. And then another, and another……….

Another example, look at federal and state gas taxes. These taxes are supposed to be for transportation infrastructure mainly in the name of roads, right? We need a safe and dependable system of roads. The government relies on folks driving their vehicles to get the money via the fuel taxes to keep our road systems safe and dependable. In fact, it behooves the government to ask people to buy bigger gas guzzling vehicles so the amount of fuel folks buy is increased thereby increasing the amount of money going into the government coffers, right? But, what does government do? It levies confiscatory and draconian regulations on vehicle fuel mileage (can you say C.A.F.E?). What happens when vehicles do not use as much fuel or become too expensive to drive and remain on the driveway? You got it, they don’t use as much fuel. When enough people don’t use enough fuel (since they now drive more hybrids), the amount of fuel used as a whole goes down and therefore, the amount of tax revenue generated to the government goes down. Knowing that government can never do with less, they have to find a way to get around this debacle of their own creation. What do they do? You guessed it again, find another tax source as a replacement. In real life, the same government that is enforcing rules to limit fuel consumption for the “betterment” of our environment (to the great detriment of our auto industry now being partly run by our President) is now looking at the possibility of mounting satellite receivers on our cars to track our mileage so we’ll be effectively taxed by the mile (and on fuel consumption since that’s not going away) so the government can recoup the money it lost when it required vehicles to get better fuel mileage. Think I’m kidding? It’s already being discussed in California, Oregon and Washington (state and DC).

Long story short, you can bet government doesn’t have your best interests in mind when they passed this monstrosity. They had their own self interest in mind. It’s just another step down the path of servitude.
Thanks!Jason

vortex45 on April 2, 2009 at 8:28 PM

The whole point of putting an extra tax on cigarettes is for revenue and NOT to correct people’s bad habits.

Remember the windfall profits the states got as a result of the class action lawsuit against Big Tobacco back in the 90′s? Where was the money supposed to go? To schools, smoking cessation programs, health care, et al right? Well, what happened when they started running out of that money? They started drives to tax more on cigarettes to save our children’s education and the like did they not? So there was an effective double-tax implemented as a result. One when the tobacco companies were sued (they had to pass the price of that to the consumer) and one after the settlement money was burned through by the government.Well, guess what, when more smokers either give up the habit (which is always a good thing but a purely private choice) or go to the black market to get their nicotine fix; what’s going to happen to the tax revenue. It’s going to go D-O-W-N! At that point, all this money that is going to the government coffers now, will diminish and will need to be replenished by guess what…. ANOTHER TAX!!! On what you ask? It’s the government, they’ll find something wrong with something else that affects something in your body that you obviously have no way of controlling your consumption with your own free will. That new tax will be used to cover the shortcomings of the previous tax it took the place of. Then once that tax runs its course, there’ll be another one after that. And then another, and another……….

Another example, look at federal and state gas taxes. These taxes are supposed to be for transportation infrastructure mainly in the name of roads, right? We need a safe and dependable system of roads. The government relies on folks driving their vehicles to get the money via the fuel taxes to keep our road systems safe and dependable. In fact, it behooves the government to ask people to buy bigger gas guzzling vehicles so the amount of fuel folks buy is increased thereby increasing the amount of money going into the government coffers, right? But, what does government do? It levies confiscatory and draconian regulations on vehicle fuel mileage (can you say C.A.F.E?). What happens when vehicles do not use as much fuel or become too expensive to drive and remain on the driveway? You got it, they don’t use as much fuel. When enough people don’t use enough fuel (since they now drive more hybrids), the amount of fuel used as a whole goes down and therefore, the amount of tax revenue generated to the government goes down. Knowing that government can never do with less, they have to find a way to get around this debacle of their own creation. What do they do? You guessed it again, find another tax source as a replacement. In real life, the same government that is enforcing rules to limit fuel consumption for the “betterment” of our environment (to the great detriment of our auto industry now being partly run by our President) is now looking at the possibility of mounting satellite receivers on our cars to track our mileage so we’ll be effectively taxed by the mile (and on fuel consumption since that’s not going away) so the government can recoup the money it lost when it required vehicles to get better fuel mileage. Think I’m kidding? It’s already being discussed in California, Oregon and Washington (state and DC).

Long story short, you can bet government doesn’t have your best interests in mind when they passed this monstrosity. They had their own self interest in mind. It’s just another step down the path of servitude.
Thanks!Jason

vortex45 on April 2, 2009 at 8:30 PM

Tobacco companies should put a warning on all cigarettes:

Warning: Tax Increase brought to you by Barack Obama. Smoke all you want, Dems need the money!

TN Mom on April 2, 2009 at 9:08 PM

Hey, I say we use the same rationale for alcohol that was used for tobacco – triple down on the current tax!

Have the PC police use the same tobacco jihad tactics against anyone buying booze. That is, start a campaign to ridicule and belittle anyone seen drinking. Make them societies outcasts. Afterall, anyone who abides in alcohol is a potential danger to themselves and others. They aren’t making the proper personal choices.

Oh, what’s that, – it’s ok to tax those stupid smokers you say. Those cigarettes aren’t good for them and we need to nanny them into proper behavior.
/s

And remember these cautionary words from C. S. Lewis: “Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience. “

SoldiersMom on April 2, 2009 at 9:44 PM

gekkobear – Your claim seems to be that reducing unhealthy habits actually increases long-term health costs due to people living longer. This statement is only true if you consider money spent on treating avoidable health issues just as good as treating unavoidable health issues.

maleman on April 2, 2009 at 3:00 PM

First, it isn’t “my claim”. I’m not the one that wrote, studied, researched, or peer reviewed that article. My opinion, although impressive I’ll admit is still generally considered less than a peer reviewed and researched article with statistical analysis published in a medical journal… to some people anyhow.

Second, the spending isn’t “just as good”? It’s different money? I didn’t realize we had different types of money spent on health care, some for “good” spending, and some for “bad” spending and the costs were different based on how it was spent.

The original argument I was responding to was that reducing smoking will reduce health care costs. Of course now that a properly sourced and peer reviewed study shows that to be false, the claim changes… why am I not surprised?

Would you like to clarify the new improved claim that justifies this tax; or should we not bother seeing as the goalposts will be hauled around again as soon as that argument also fails?

Go ahead, explain how “good spending” of say $1 million costs less than “bad spending” of $1 million dollars and money is entirely different. Or claim that the costs are now irrelevant… or whatever.

Just let me know when you’re done moving the goalposts.

gekkobear on April 3, 2009 at 12:49 PM

Comment pages: 1 2 3