Obama budget would nearly double cigarette tax
Health care advocates hope a hike would prompt smokers to quit, while opponents say it would place too heavy a burden on the poor.
Among the $400 billion in tax increases tucked into the new budget is a proposal to increase the federal tax on cigarettes from $1.01 a pack to $1.95. The new cigarette tax would raise an estimated $78 billion over the next decade to pay for preschool programs for children.
Not surprisingly, health care advocates love the plan -- not only for the revenue but for the motivation it provides smokers to cut back or quit. Tax income aside, the Congressional Budget Office says the health improvement from decreased smoking would save the government about $1 billion over 10 years and generate additional revenue of $3 billion through increased earnings for healthier workers.
There's something to that. CNN points out that after a 62-cent-a-pack tax hike was passed in 2009, cigarette sales dropped by 10%, according to the Campaign for Tobacco-Free Kids. Meanwhile, a Centers for Disease Control study finds that despite anti-smoking measures and increased taxes on cigarettes, costs related to smoking amount to $193 billion a year in both direct medical payments and lost productivity. Smoking-related illness still accounts for 443,000 deaths a year in the U.S.
The plan's opponents are just as easily typecast as their health care counterparts: tobacco companies and anti-tax lobbyists. Cigarette maker Reynolds American (RAI) expressed strong opposition to the tax on the grounds that it disproportionately affects low- to middle-income Americans.
According to Reynolds, the median household income for a smoker in 2011 was $27,700, compared with $45,761 for nonsmokers. Nearly half of all smokers had a household income of less than $25,000 a year. Meanwhile, fewer than 15% of smokers had a household income of more than $75,000.
Reynolds did not, however, address a 2012 Gallup survey that found that 68% of American smokers consider themselves addicted to cigarettes. Meanwhile, 88% say if they could do it over again, they wouldn't start smoking, while 78% expressed a desire to quit.
Those numbers are exactly why anti-tax groups are against the new smoking tax. They question the wisdom of a tax that not only doesn't vary by income but applies only to a population that's 20% of all Americans and falling, according to Gallup. With the tax's stated purpose of stopping people from smoking, opponents wonder how long the government will be able to milk its dying cash cow.
Our forefathers came to this country for a reason to escape the taxes of the British.
The largest percentage of smokers are in the lower income brackets. So who is really having their taxes raised?
Personally, I could care less, I don't smoke or use tobacco products. But he said he wouldn't raise taxes on the poor.
Thanks for nothing Obutta
Hope and Change.......... He hopes you can't quit so he can get your change.
who the hell is this guy bullcrapping, when he first got in the whitehouse cig's doubled, my rolling tabacco doubled, from 4.50 a ppouch to 8.45, cig's in ct. is crazy enough, 7 to 9.50 a pack, then the state tax on top of that, my granddaughter got me to stop 2 years ago, but 8.50 every 4 days wasn't breaking the bank, but this tax **** will kill alot of people, trying to take money from the elderly once again, but can send our tax money to the ragheads over to the mideast, WTF, someone has to do something about this black runaway train on spending, him and his moooochelle
I love it when the CBO comes up with pie in the sky numbers like "3 billion over 10 years through increased earnings for healthier workers." all the while they have no idea how many will quit during this 10 year process of collecting 78 billion to pay for preschool.
And if everyone quits? Obama will just pull 78 billion from somewhere else, because the first thing he will do is pull a presser with all the little toddlers crying because they can't go to preschool on the government dole...
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