SCHIP Tobaccoo Tax

On September 12, 2008, Barack Obama was in Dover, New Hampshire, on the campaign trail.He was talking taxes and he made a promise, a "firm pledge."
BARACK OBAMA: And I can make a firm pledge: 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.Read Obama's lips: NO FAMILY MAKING LESS THAN $250,000 A YEAR WILL SEE ANY FORM OF TAX INCREASE.He lied.On February 4, 2009, the new president signed a bill expanding the State Children's Health Insurance Program (SCHIP), and increasing the federal excise tax on tobacco by a massive 156 percent.It's not just the feds that are increasing taxes on tobacco products. Here in Wisconsin, Gov. Jim Doyle's proposed budget would slap an additional 75 cent per pack increase in the state cigarette tax.Remember, Doyle said: "Going forward, my mind will be open to every solution -- except one. We should not -- we must not -- and I will not -- raise taxes."Yeah, right.Obviously, Obama broke his promise about families making less than $250,000 a year not seeing ANY FORM of tax increase.Amanda Carpenter writes:
55 percent of smokers are considered "working poor" and one in four live below the poverty line. Aside from the fact that this tax disproportionately hits poorer Americans, the tax doesn't make fiscal sense.From the Wall Street Journal:
Congress is moving so fast and furious that it's impossible to keep up. But we didn't want to miss telling you about the tax increase on the poor and middle class that Congress is about to pass without a whit of media attention.We mean the tax increase on smokers that is part of the new children's health-care subsidy bill. To finance this $73 billion entitlement expansion over 10 years, the bill imposes an additional federal tax of 61 cents per cigarette pack, from 39 cents today. According to the Bureau of Economic Analysis, 96% of America's 25 million smokers make less than $150,000 a year. The Tax Foundation estimates that 99% of the smokers who will pay the new tax make less than $250,000, which is the income below which President Obama promised would see no tax increase....The number of smokers keeps falling, but health-care costs keep rising. So paying for the biggest new health-care expansion in years with a declining revenue source is a guarantee of future red ink that will increase pressure for higher income taxes too. Just ask the politicians in Maryland, who doubled their cigarette tax two years ago to finance a new health-care program. That has led to 25% less tobacco revenue than expected because of declining sales, so the program is already in the red after its first year. But hey, it's the thought that counts.In sum, Obama claimed to be the champion of low and middle income Americans. Obviously, the promises he made on the campaign trail were empty.Bottom line: Funding this massive health care expansion with a federal excise tax on tobacco, a declining revenue source, is guaranteed to fail.