Smoke break gets more expensive with tax boost
By RICARDO ALONSO-ZALDIVAR
Associated Press Writer
Mar 29, 2:16 PM EDT
WASHINGTON (AP) -- However they satisfy their nicotine cravings, tobacco users are facing a big hit as the single largest federal tobacco tax increase ever takes effect Wednesday. Tobacco companies and public health advocates, longtime foes in the nicotine battles, are trying to turn the situation to their advantage. The major cigarette makers raised prices a couple of weeks ago, partly to offset any drop in profits once the per-pack tax climbs from 39 cents to $1.01.
Medical groups see a tax increase right in the middle of a recession as a great incentive to help persuade smokers to quit.
Tobacco taxes are soaring to finance a major expansion of health insurance for children. President Barack Obama signed that health initiative soon after taking office.
Other tobacco products, from cigars to pipes and smokeless, will see similarly large tax increases, too. For example, the tax on chewing tobacco will go up from 19.5 cents per pound to 50 cents. The total expected to be raised over the 4 1/2 year-long health insurance expansion is nearly $33 billion.
Smokers are mulling their options.
Standing outside an office building in downtown Washington last week, 29-year-old Sam Sarkhosh puffed on a Marlboro Light. His 8-year-old daughter has been pleading with him to quit, he explained, and he has set a goal to give up smoking by his 30th birthday.
"I'm trying to quit smoking, and it could help," said Sarkhosh, an information systems specialist. "I don't think it will stop me from buying cigarettes every now and then, but definitely not as often." A friend who smokes Camels went out and bought four cartons in advance, he said.
The tax increase is only the first move in a recharged anti-smoking campaign. Congress also is considering legislation to empower the Food and Drug Administration to regulate tobacco. That could lead to reformulated cigarettes. Obama, who has agonized over his own cigarette habit, said he would sign such a bill.
Prospects for reducing the harm from smoking are better than they have been in years, said Dr. Timothy Gardner, president of the American Heart Association. The tax increase "is a terrific public health move by the federal government," he said. "Every time that the tax on tobacco goes up, the use of cigarettes goes down."
About one in five adults in the United States smokes cigarettes. That's a gradually dwindling share, though it isn't shrinking fast enough for public health advocates.
The Centers for Disease Control and Prevention says cigarette smoking results in an estimated 443,000 premature deaths each year, and costs the economy $193 billion in health care expenses and lost time from work. Smoking is a major contributor to heart disease, cancer and lung disease.
Public health officials are urging individual doctors and staff at telephone "quit lines" in every state to make the most of the tax increase by reaching out to smokers. But it's unclear how deeply the tax will cut into tobacco consumption.
Eric Lindblom, research director for the Campaign for Tobacco-Free Kids, says he expects a drop of at least 6 percent to 7 percent among young smokers.
Philip Gorham, who tracks the tobacco business for Morningstar, the investment research firm, said he expects an overall drop of 4 percent to 5 percent this year. What happens after that is less certain, especially as the economy recovers.
"I would expect a road bump this year," said Gorham. "But these companies will still be extremely profitable. I still think they will make their return on capital by wide margins in the long run."
Philip Morris USA, the largest tobacco company and maker of Marlboro, is forecasting a drop, but spokesman Bill Phelps said he cannot predict how big. Philip Morris raised Marlboro prices by 71 cents a pack early this month, and prices on smaller brands by 81 cents a pack. Other major companies followed suit.
The pricing moves raised eyebrows. "That's nothing more than greed," said Kevin Altman, an industry consultant who advises small tobacco companies. "They weren't required to charge that until April 1. They are just putting that into their pockets."
Responded Phelps: "We raised our prices in direct response to the federal excise tax increase, and people who are upset about that should find out how their member of Congress voted, and contact him or her."
Some policy analysts have questioned the wisdom of boosting tobacco taxes to finance health care for children. They argue that the fate of such a broad program should not depend on revenues derived from a minority of the adult population, many of whom have low incomes and are hooked on a habit. The tobacco industry is also warning that the steep increase will lead to tax evasion through old-fashioned smuggling or by Internet purchase from abroad.
But smoking control advocates such as Lindblom say tobacco taxes should be even higher. "There's a lot of room to go after cigars and smokeless," he said. "We are certainly hopeful that health care reform will include some more increases."
Standing outside a Washington department store, attorney Margaret Webster, 42, puffed on a Marlboro Ultra Light and lamented the fact that the government is reaching deeper into her pocketbook.
"I don't think we (smokers) like it," she said. "But I've heard so many people say they were going to quit when the price went up ... and they're still smoking."
New tobacco tax rates: http://tinyurl.com/bt9c32
© 2009 The Associated Press.
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http://hosted.ap.org/dynamic/stories/T/TOBACCO_TAX?SITE=ININS&SECTION=HOME&TEMPLATE=DEFAULT
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My Thoughts
"Some policy analysts have questioned the wisdom of boosting tobacco taxes to finance health care for children. They argue that the fate of such a broad program should not depend on revenues derived from a minority of the adult population, many of whom have low incomes and are hooked on a habit."
That was I was saying back when the tax hike was being voted on.
Now, I agree that cigarettes are bad, and people should quit. However, should the Democrats or anyone else for than matter be using the tax codes to change our behaviors or to punish smokers? No, they shouldn't.
Plus, if it is as they say: the higher the less people smoke, then they aren't going to get enough money to pay for S-CHIP, and it'll be another big buden on the American taxpayers.
Showing posts with label S-CHIP. Show all posts
Showing posts with label S-CHIP. Show all posts
Monday, March 30, 2009
Wednesday, February 4, 2009
Update on the Tax Hike on the Poor to Help the Poor
Obama gets his S-CHIP Trojan Horse, first tax hike of 2009: “The first step”
By Michelle Malkin • February 4, 2009 04:56 PM
As expected, the House today gave final approval to the S-CHIP government health care expansion funded with a massive tax hike on smokers. President Obama is set to sign the bill amid great “progressive” fanfare. The kiddie human shield strategy strikes again.
The vote was 290-135.
Yeas Democratic 250 Republican 40.
Nays Democratic 2 Republican 133.
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http://michellemalkin.com/2009/02/04/obama-gets-his-s-chip-trojan-horse-first-tax-hike-of-2009/
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http://clerk.house.gov/cgi-bin/vote.asp?year=2009&rollnumber=50
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My Thoughts
Hold your wallet tight. The tax hikes on everyone is starting.
By Michelle Malkin • February 4, 2009 04:56 PM
As expected, the House today gave final approval to the S-CHIP government health care expansion funded with a massive tax hike on smokers. President Obama is set to sign the bill amid great “progressive” fanfare. The kiddie human shield strategy strikes again.
The vote was 290-135.
Yeas Democratic 250 Republican 40.
Nays Democratic 2 Republican 133.
---------------------------------------------------------------
http://michellemalkin.com/2009/02/04/obama-gets-his-s-chip-trojan-horse-first-tax-hike-of-2009/
---------------------------------------------------------------
http://clerk.house.gov/cgi-bin/vote.asp?year=2009&rollnumber=50
---------------------------------------------------------------
My Thoughts
Hold your wallet tight. The tax hikes on everyone is starting.
Thursday, January 22, 2009
Pelosi and Dems Raise Taxes on the Poor in Order to Help the Poor
Obama’s recession remedy: Tax the poor! By Michelle Malkin • January 14, 2009 04:43 AM
It’s baaaack. Remember S-CHIP? The Democrats are racing their universal health care Trojan Horse through the House today and in the Senate by Friday. Yesterday evening after I filed my syndicated column (printed below) on Obama and the Democrats’ first massive tax increase of 2009, the 285-page text of the proposed S-CHIP expansion went online. It’s H.R. 2 and something a significant number of congressional members will not do before voting for the behemoth bill.
Every legal tobacco product from premanufactured cigarettes and cigarette papers to cigars to roll-your-cigarettes, pipe tobacco, and smokeless tobacco will be taxed out the wazoo. Take roll-your-own tobacco. It’s currently taxed at $1.0969/lb. The Obama/Democrat S-CHIP plan would hike that to $24.62/lb. Cigarette taxes would rise from $19.50 per thousand to $50.00 per thousand for small cigarettes and from $40.95 per thousand to $105.00 per thousand for large cigarettes.
House Speaker Nancy Pelosi refuses to have an open debate on the bill. House GOP leaders lodged a protest. (But remember that 42 Republicans sided with Pelosi last January in a failed attempt to override President Bush’s veto.)
So much for transparency and openness. And so much for those promises to provide tax relief to “ordinary Americans.” As usual, Barry O was just blowin’ smoke:
Obama’s recession remedy: Tax the poor!
by Michelle Malkin Copyright 2008
“Everybody’s going to have to give,” President-elect Barack Obama warned over the weekend. And some people will have to give more than others – starting with low-income smokers. Democrats are rushing this week to impose massive tax hikes of at least 61 cents on every cigarette pack sold in America, in addition to new increases on other tobacco products. The money will fund a long-plotted federal expansion of the State Children’s Health Insurance Program (S-CHIP).
Yes, this is Dr. Big Nanny’s prescription for recession: Punitive tax increases on the poor to feed a universal health care Trojan Horse.
Obama and his liberal Democrat colleagues sure have a funny way of demonstrating “progressive” values, don’t they? Health surveys show that smokers are more likely to be blue-collar workers, minorities, and have less than a high school education. The National Taxpayers Union noted that tobacco taxes take a 50-times-larger share of income from those earning less than $20,000 than those earning more than $200,000. Put another way: Families making less than $30,000 per year pay more than half of all taxes paid on cigarettes, while families making more than $60,000 pay only 14 percent.
That’s the dictionary definition of “regressive,” not “progressive.”
And what will that money buy? S-CHIP, you’ll recall, is the joint federal-state program that covers health insurance for children and families at or near the poverty line. Over the past two years, President Bush and the Republicans took a rare, fiscal conservative stand against widening eligibility criteria far beyond the working poor. Democrats wanted to be able to enroll families with incomes at 300 or 400 percent of the poverty level – adding an estimated $35 billion over five years to the existing S-CHIP funding costs.
Opponents of this Hillarycare-esque push were lambasted as cruel child-haters for arguing that the program should not be extended to include well-off families, illegal aliens, and single adults. They were attacked as heartless penny-pinchers for questioning the wisdom of subsidizing the S-CHIP expansion with a dwindling and unstable funding source (smoking is on the decline and cigarette tax revenues are shrinking). Left-wing comedienne Joy Behar called me a “b*tch” on national television for reporting that the Democrats’ poster family for S-CHIP expansion to cover the “poor,” the Frost family of Baltimore, owned middle-class assets including two properties and three cars.
But if these do-gooders truly cared about The Children, they’d be cursing mightily over the squandering of current S-CHIP funds and the cheating of the very children the program was intended to help. State data analyzed by the Department of Health and Human Services reveal that 13 states spent more than 44 percent of their S-CHIP funds in 2008 on people who are neither children nor pregnant women. Michigan topped the list with more than 70 percent of its federal children’s health insurance funds earmarked for adults who have no kids.
In New Jersey, people earning as much as $295,000 were enrolled in its S-CHIP program dubbed “NJ FamilyCare.” Like many states, New Jersey failed to check eligibility for all program enrollees and refuses to do stringent assets tests. As I’ve noted before, the refusal to do assets tests on federal health insurance programs is why federal entitlements are exploding and government keeps expanding. After an audit found that the program had paid $43.1 million to participants without knowing if they were eligible, Assemblyman Richard Merkt, R-Morris observed that it “called into serious question the state’s competence to run health insurance programs.” Multiply that by 50 states.
How will the Democrats prevent such fraud? I’d give you more details about the Obama/Democrat tax hike on the poor to expand children’s health care coverage for the non-poor and non-children, but as of Tuesday afternoon, there was no legislative text available. And no hearings are planned before the expansion is rushed through for Obama to sign. The Wall Street Journal did report that Democrats plan to lift decade-old restrictions to allow legal immigrant children to tap into S-CHIP. (Open-borders activists hope it’s the camel’s nose under tent for illegal alien applicants.) But there’s no word on whether (or how) citizenship eligibility requirements will be strengthened. The Democrat leadership hasn’t responded to Republican entreaties on that issue, either. Hurray for the deliberative process.
What I can tell you for sure is that the S-CHIP expansion is a rest stop on the road to a universal health insurance entitlement, built on the backs of overtaxed, low-income workers. (Listen to Democrat Tom Vilsack admit it openly here.) Welcome to the era of “shared sacrifice.”
-----------------------------------------------------------
http://michellemalkin.com/2009/01/14/obama%e2%80%99s-recession-remedy-tax-the-poor/
-----------------------------------------------------------
My Thoughts
This is just the beginning of the tax hikes on the poor that the Democrats will try to sneak past us. They claim that they only want to raise taxes on the poor, but this show that in reality they want to raise it on everyone.
It’s baaaack. Remember S-CHIP? The Democrats are racing their universal health care Trojan Horse through the House today and in the Senate by Friday. Yesterday evening after I filed my syndicated column (printed below) on Obama and the Democrats’ first massive tax increase of 2009, the 285-page text of the proposed S-CHIP expansion went online. It’s H.R. 2 and something a significant number of congressional members will not do before voting for the behemoth bill.
Every legal tobacco product from premanufactured cigarettes and cigarette papers to cigars to roll-your-cigarettes, pipe tobacco, and smokeless tobacco will be taxed out the wazoo. Take roll-your-own tobacco. It’s currently taxed at $1.0969/lb. The Obama/Democrat S-CHIP plan would hike that to $24.62/lb. Cigarette taxes would rise from $19.50 per thousand to $50.00 per thousand for small cigarettes and from $40.95 per thousand to $105.00 per thousand for large cigarettes.
House Speaker Nancy Pelosi refuses to have an open debate on the bill. House GOP leaders lodged a protest. (But remember that 42 Republicans sided with Pelosi last January in a failed attempt to override President Bush’s veto.)
So much for transparency and openness. And so much for those promises to provide tax relief to “ordinary Americans.” As usual, Barry O was just blowin’ smoke:
Obama’s recession remedy: Tax the poor!
by Michelle Malkin Copyright 2008
“Everybody’s going to have to give,” President-elect Barack Obama warned over the weekend. And some people will have to give more than others – starting with low-income smokers. Democrats are rushing this week to impose massive tax hikes of at least 61 cents on every cigarette pack sold in America, in addition to new increases on other tobacco products. The money will fund a long-plotted federal expansion of the State Children’s Health Insurance Program (S-CHIP).
Yes, this is Dr. Big Nanny’s prescription for recession: Punitive tax increases on the poor to feed a universal health care Trojan Horse.
Obama and his liberal Democrat colleagues sure have a funny way of demonstrating “progressive” values, don’t they? Health surveys show that smokers are more likely to be blue-collar workers, minorities, and have less than a high school education. The National Taxpayers Union noted that tobacco taxes take a 50-times-larger share of income from those earning less than $20,000 than those earning more than $200,000. Put another way: Families making less than $30,000 per year pay more than half of all taxes paid on cigarettes, while families making more than $60,000 pay only 14 percent.
That’s the dictionary definition of “regressive,” not “progressive.”
And what will that money buy? S-CHIP, you’ll recall, is the joint federal-state program that covers health insurance for children and families at or near the poverty line. Over the past two years, President Bush and the Republicans took a rare, fiscal conservative stand against widening eligibility criteria far beyond the working poor. Democrats wanted to be able to enroll families with incomes at 300 or 400 percent of the poverty level – adding an estimated $35 billion over five years to the existing S-CHIP funding costs.
Opponents of this Hillarycare-esque push were lambasted as cruel child-haters for arguing that the program should not be extended to include well-off families, illegal aliens, and single adults. They were attacked as heartless penny-pinchers for questioning the wisdom of subsidizing the S-CHIP expansion with a dwindling and unstable funding source (smoking is on the decline and cigarette tax revenues are shrinking). Left-wing comedienne Joy Behar called me a “b*tch” on national television for reporting that the Democrats’ poster family for S-CHIP expansion to cover the “poor,” the Frost family of Baltimore, owned middle-class assets including two properties and three cars.
But if these do-gooders truly cared about The Children, they’d be cursing mightily over the squandering of current S-CHIP funds and the cheating of the very children the program was intended to help. State data analyzed by the Department of Health and Human Services reveal that 13 states spent more than 44 percent of their S-CHIP funds in 2008 on people who are neither children nor pregnant women. Michigan topped the list with more than 70 percent of its federal children’s health insurance funds earmarked for adults who have no kids.
In New Jersey, people earning as much as $295,000 were enrolled in its S-CHIP program dubbed “NJ FamilyCare.” Like many states, New Jersey failed to check eligibility for all program enrollees and refuses to do stringent assets tests. As I’ve noted before, the refusal to do assets tests on federal health insurance programs is why federal entitlements are exploding and government keeps expanding. After an audit found that the program had paid $43.1 million to participants without knowing if they were eligible, Assemblyman Richard Merkt, R-Morris observed that it “called into serious question the state’s competence to run health insurance programs.” Multiply that by 50 states.
How will the Democrats prevent such fraud? I’d give you more details about the Obama/Democrat tax hike on the poor to expand children’s health care coverage for the non-poor and non-children, but as of Tuesday afternoon, there was no legislative text available. And no hearings are planned before the expansion is rushed through for Obama to sign. The Wall Street Journal did report that Democrats plan to lift decade-old restrictions to allow legal immigrant children to tap into S-CHIP. (Open-borders activists hope it’s the camel’s nose under tent for illegal alien applicants.) But there’s no word on whether (or how) citizenship eligibility requirements will be strengthened. The Democrat leadership hasn’t responded to Republican entreaties on that issue, either. Hurray for the deliberative process.
What I can tell you for sure is that the S-CHIP expansion is a rest stop on the road to a universal health insurance entitlement, built on the backs of overtaxed, low-income workers. (Listen to Democrat Tom Vilsack admit it openly here.) Welcome to the era of “shared sacrifice.”
-----------------------------------------------------------
http://michellemalkin.com/2009/01/14/obama%e2%80%99s-recession-remedy-tax-the-poor/
-----------------------------------------------------------
My Thoughts
This is just the beginning of the tax hikes on the poor that the Democrats will try to sneak past us. They claim that they only want to raise taxes on the poor, but this show that in reality they want to raise it on everyone.
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