By Scott Tibbs, March 20, 2009
On February 4, President Barack Obama signed a tax increase on cigarettes that will appropriately take effect on April Fools Day. The tax will increase from 39 cents per pack to $1.01 per pack. The National Association of Tobacco Outlets estimates that the tax increase will put 117,000 people out of work. In a harsh recession where many people have already lost their jobs, why is it a good idea to put another burden on the economy and hurt many people? Is this the change we can believe in that Obama promised?
Ideally, people should not smoke. The fewer people that smoke, the better. Smoking is bad for your health and smoking-related health complications result in an estimated 440,000 deaths each year. But people should quit of their own free choice, not because the federal government's fiscal policy is geared toward social engineering. Government should not be increasing taxes anywhere in this economy. If anything, the tax burden should be going down to reduce pressure on the economy.
Cigarette taxes, like other "sin" taxes, are more politically feasible than taxes that everyone pays. But if SCHIP is a good program, should the taxes used to pay for it be spread more evenly across the economy, rather than targeted toward a specific group of people? Will this tax increase have a disproportionate impact on the poor? Even if this is a god idea, did the tax increase for SCHIP need to be passed now, in this economic climate? This is the wrong policy at a worse time. Obama should be ashamed of himself for signing a tax increase that will cause people to lose their jobs when they can least afford it.
