ScottMcDaniel dot org

I just noticed the ‘BREAKING NEWS’ banner – that makes it all the funnier.

The SCHIP law was signed into being by President Obama tonight. While I think it’s great that we can help poor kids get better health care, I am not so thrilled that it is being funded by a vice tax.

If smoking tobacco products is so bad for people, it shouldn’t be taxed, it should be banned.

Saying something is evil and vile and deadly then saying – ok, we’ll you can do it, but we’re going to charge you sixty cents more per pack of cigarettes and three bucks per cigar (yes, seriously) in order to pay for the health care costs you are causing – well, that’s just stupid. Vice taxes are counterproductive and tend to cause more problems than they solve.

That being said, I’m glad I have a few hundred sticks tucked away in the humidor.

Check out this bit from Heritage.org (a very right wing, but in this case correct, site):

Members of Congress seeking to expand the State Children’s Health Insurance Program (SCHIP) to cover children from wealthier families are exploring new ways to pay for it. The Senate Finance Committee generally has agreed to reauthorize SCHIP for five years with a $35 billion expansion funded by an increase in the federal tobacco tax by 61 cents per pack.[1]

While a tobacco tax is a politically popular funding source, it has several significant shortcomings:

• A tobacco tax disproportionately burdens low-income Americans, lacks long-term stability, and ultimately results in significant shifting of health care costs onto others.

• With the number of smokers already declining, a tobacco tax would further reduce the number of smokers, thereby eroding the funding source.

• To produce the revenues that Congress needs to fund SCHIP expansion through such a tax would require 22.4 million new smokers by 2017.

Rather than making SCHIP dependent on increasing the number of smokers, Congress should refrain from narrow government program expansions and work on a broader strategy for improving access to affordable, private health insurance for all Americans–including children.

Who Would Pay?

Increasing the tobacco tax is an inequitable way to fund SCHIP, because a large portion of the burden would fall on poor and low-income families and the relatively young. Around half of smokers are in families earning less than 200 percent of the federal poverty line (FPL), so increasing the tobacco tax would burden the families in the income class that SCHIP and Medicaid are trying to help.[2] Furthermore, smokers are more likely to be poor or low-income than wealthy.[3] (See Chart 1.) With an expanded tobacco tax, SCHIP expansion to higher income levels would largely be funded by lower income persons, those who can least afford it.

Young adults are also disproportionately impacted by the tobacco tax: Forty-three percent of smokers are ages 24 to 44.[4] (See Chart 2.) Placing the burden of expanding this program on the shoulders of any small subset of the population is unfair. Neither low-income families nor young adults should be held responsible for funding an unnecessary expansion of SCHIP.

You know the kids are like, ‘what do you mean we dont get presents? It’s Christmas!’.
:)

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