Congressional Democrats looking to spend an additional $35 billion on health coverage for children are drawing criticism for the method they've selected for funding the program: An increased tax on cigarettes. The program would increase the tax from 39 cents per pack all the way up to $1.Given that smoking is more common among lower-income Americans, the tax is seen as regressive: Health coverage for children will come out of the pockets of those who can't afford it.
Democrats argue that the tax may, in the long run, discourage people from smoking. I was skeptical about that at first -- There are tons of reasons not to smoke, an additional 61-cent tax per pack seems unlikely to sway anyone who's been unmoved by the average cost of $4.50 per pack before the proposed tax increase. Oh and, incidentally, smoking causes cancer and makes you smell bad.
But apparently Philip Morris (NYSE: MO) thinks otherwise. According to the Associated Press, "Bill Phelps, spokesman for Philip Morris USA, based in Richmond, Va., said a steep federal tax increase could accelerate the national decline in smoking to the point that the insurance would have to find other revenue sources."
And wouldn't that be wonderful! If an increased tax of 61 cents per pack is enough to accelerate the national decline in smoking, then we should go for it: regressive tax or not. If someone can afford to spend $4.50 per pack, they will not be cast into the poorhouse by an additional tax of 61 cents to provide health care for underprivileged children.
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Reader Comments (Page 1 of 1)
1. WHAT'S FAIR ABOUT SMOKERS FOOTING THE BILL FOR THE MEDICAL NEEDS OF UNDERPROVILIGED CHILDREN? ISN'T THIS THE RESPONSIBILITY OF ALL AMERICANS? THIS IS A FORM OF DISCRIMINATION!!
Posted at 3:43PM on Oct 1st 2007 by karenkibbler
2. I am not sure which is more regressive by letting poor puffers to keep doing it or pushing them to quit and save money for their food and rent and kids... Smokers are not the only ones getting cancer, they makes everyone else uncomfortable and sick even outdoors!! What a heck of a diversity of views on smoking!! Now lets move on with firewood and charcoal!! Tax those? Why not? Or we ought to ban those polluting chimneys and stovepipes!! Also outdoor grills!! People think they must salt and pepper the air we breath with soot and particulates to make breathing more delicious and tasitier?? Hoo boy!
Posted at 7:25PM on Oct 1st 2007 by Gumby
3. Smokers still paying only 39 cents for taxes on a pack?? This is a bargain! Sure it will be regressive on low income puffers and it will be even more regressive on Altira shareholders!!! The latter will be great news for the stock market who are tired and sick of those Altira investors who are still holding MO stock and not willing to move to other more deserving stocks like those in my portfolio!! Altira is one of the longest running bull stock in history and it is about time it goes out to the pasture!!
Posted at 9:02PM on Oct 1st 2007 by Gumby
4. OK, when are they gonna start taxing alcohol to the point people can't drink anymore? It kills far more people then cigarettes do, directly and indirectly.I notice the government doesn't want to touch that!
I have to WORK and pay for my own healthcare, why don't some of these parents try getting a job and provide for thier own children instead of leeching off the government and taxpayers?
Posted at 9:03PM on Oct 1st 2007 by Terri Wehry
5. Again with the smokers! This is an unfair tax no matter how one looks at it.
Haven't heard of anyone being killed while driving and smoking. A drunk driver killed our daughter and left her three young children with no mother and no support.
When talking to our legislators about the singling out of tobacco over alcohol to be taxed we were told that the brewery lobbyists (Busch) in our state (MO) have more money and powerful influence than any tobacco lobbyist not located here. It all comes down to money and the prevailing band wagon regardless of the effects of any "sin taxable" product on our population.
This logic is self serving for the governing houses. The money collected from this tax will soon be buried in the budget or used for things other than its original purpose. It happens repeatedly.
I am so disappointed in our legislators. Our own Senator Bond (R) voted for the federal tax on tobacco. So sad to say that he will not be getting our future votes that he has always had in the past.
Should the tobacco tax not be vetoed by President Bush or overridden by the legislature there will be other products taxed in the same manner. Disposable diapers fill the landfills. Tax on sugar has already been looming in the future. Paper towels next? There will always be something to tax at the will of the governing body. It was tried in Boston when England taxed tea. Your vice, your products could be next unless we make a stand.
Posted at 9:03PM on Oct 1st 2007 by Sue
6. If the Congressional Democrats are loking for some
.61 cents on a pack of cigarets (35billion dollars) to pay for health coverage for children from those who can least afford it, why not tax those earning $250,000 a year which would include all of Congress. They are the once that can afford the additional tax.
Posted at 9:03PM on Oct 1st 2007 by l. j. dAIDONE
7. The only ones who really lose in this are the tobacco companies, and who cares about them. They still market to kids, whether they'll admit to it or not. They're now using Youtube and other internet videos to try to promote and glamorize smoking. And of course they spend huge sums of money and will do anything they can to try to derail any kind of tax on cigarettes. Kids who are not insured will win with the extra tax dollars covering their insurance needs. Smokers will be encouraged to quit by the increased cost, so whether some of them realize it or not, it's a positive there too. Reducing the amount smoked will decrease health care costs by a large amount, and that's another plus for all taxpayers.
Posted at 9:04PM on Oct 1st 2007 by Paul
8. An increase from .39 to 1.00? What? A carton of cigarettes shot up by $10.00 not so very long ago -- maybe a year? THAT was a dollar a pack INCREASE right there. So these figures do not make sense to me.
Posted at 11:08PM on Oct 1st 2007 by Maureen W
9. "And wouldn't that be wonderful! If an increased tax of 61 cents per pack is enough to accelerate the national decline in smoking, then we should go for it: regressive tax or not. If someone can afford to spend $4.50 per pack"
You know what's gonna be wonderful? When you get knifed in a parking garage by some desperate son of a bitch that's getting by day-to-day and just saw the price of his his nicotine fix jump 10%. Regressive tax or not? I think a lot of middle-class snobs like yourself might end up paying it in blood and wallets.
Posted at 9:41AM on Oct 2nd 2007 by Dan
10. Most politicans never mention alchol for additional revenue. Could this be because most are users?
Posted at 12:22PM on Oct 2nd 2007 by Don
11. Let's tax the politicians! Another rediculious effort to raise taxes...When will it stop? Can't people see where we are headed....
Posted at 8:07PM on Oct 2nd 2007 by Kris
12. Nothing makes you cough like cigarettes!! It is ironic that smokers is healthier than nonsmokers because smokers inhale through filters while non smokers inhale the wafting filty second hand smoke both from the end of cigarettes and the carbon dioxide enriched exhausts of passing smokers!!! UGh!! Tax em behind the trees!!
Posted at 4:59PM on Oct 3rd 2007 by Gumby
13. I always suspect that some companies looking for cheap ways to dispose of combustible hazardous wastes hires smokers to mix it with tobacco and lighten them up and walk as fast as they can without smoking one bit. Passer by walkers got headaches and stupdors and wonder why....
Posted at 5:00PM on Oct 3rd 2007 by Gumby
14. What is this "underprivileged children" baloney? Did you even READ the bill? According to the Democrats, any family with an income below $67000 - that's right, $67000! is "underpriveleged" and eligible to have YOU help with their kid's medical bills! And the Demos wanted eligibility to go up to - get this - $80,000!!! but calmer Republican heads arrived at a "compromise". If this isn't the start of Billary's socialized medicine, then it's darn close to it!
Posted at 6:24PM on Oct 3rd 2007 by Hutch Liebewein
15. I think the real point is not about taxing smokes, but of giving free medical to families earning up to $80,0000, including the 30-60% who currently have private insurance. It is nothing more than A Give away plan: bush knows that... the liberals distort the truth. It "was" A needy child" plan; but taxing the poor to make it A middle class plan is bad business. The prez is right about slowing growth in this give-away.
Posted at 5:34PM on Oct 7th 2007 by WADE
16. 1) It is only the FEDERAL TAX on cigarettes that is $0.39 per pack. Each state has additional taxes, which can add up to a very expensive habit if you are in a state that is taxing cigarettes to death.
2) The real problem with this is that the funding source is not linked to the item being funded. That means that the tax will end up (over the long run) not providing the revenue stream necessary to pay for the cost of child health care so the federal government will go looking for other revenue streams (such as raising our income taxes). If this were money to be used for combatting tobacco-related illnesses I could see the logic but simply taxing smokers because you see them as a convenient revenue source is wrong.
3) With all of the taxes that cigarette smokers pay (coupled with their lower life spans = lower social security payments, medicare payments, etc.) it is not entirely clear to me that cigarette smokers are undertaxed. Indeed, since we all die someday (yes, we do!), the medical costs argument is one of the weakest ones. Most cigarette smokers end up not collecting significantly on social security, medicare, or public pensions (if they are government workers) even though they pay into them all their lives, so it very well might be that cigarette smokers actually SAVE the government money.... oh, but we don't want to admit that maybe our biases are showing, do we?
Posted at 10:17AM on Oct 8th 2007 by Zagros
17. Why not increase the tax on liquor also. I use to smoke and was able to quit, but adding more taxes didn't stop me from smoking. Yes it's deadly but how many are killed everyday from drinking . How many DWI's are there on a day to day basis which leads to loss of income and the loss of lives? The cost of a lawyer to go to court to allow you to drive to and from work is expensive. If you kill someone while driving drunk, there is no cost that can bring back the life that was lost. What about the rehab homes that are in our towns that the taxpayer pays for? Do they do any good? There aren't any halfway houses for smokers! And just if what if people had a light bulb moment and did quit smoking? Where would the money come from then? Happy hours etc. are as deadly if not more so. Add some heafty taxes to bars, liquor stores etc. and you'll be able to give all children healthcare. Smoking, alcohol, all can be deadly. Why single out one group of people? Its an addictive behaviour and not just are a low income problem. There has to be a better way to get the medical needs of our children met. The saying "Its takes a village to raise a child", then it takes a country from all walks of life to help make sure our children get the medical help they need no matter who they are or what there familys income.
Posted at 2:35PM on Oct 9th 2007 by sharonna