A Tax Increase I Kind of Agree With

Well, just to show that I'm not completely anti-everything, here's something the government is doing that I kind of agree with. This month the federal excise tax on cigarettes will nearly double, from 62 cents to $1.01. This is a huge increase and is probably necessary due to a decrease in tax revenue based on a decrease in cigarette sales. Instead of cutting the programs funded by this tax, government increases taxes.

You would think that I'd be against this because I don't want the government telling me what to do. But I'll tell you what makes this different that me being forced to wear my seat belt. Smoking doesn't merely affect the smoker and it could legitimately be argued that it infringes on the inalienable rights of others. If you believe in second hand smoking, which I consider more believable than stopping global warming, then there's a right to life issue. In my unending pursuit of happiness, I avoid making my clothes and hair smell like a trashcan, so there's two of the big three. I'd also say that 10% of the time my asthma kicks in, its because of a whiff of cigarette smoke.

In addition, I would consider smoking to be a luxury, so a sort of luxury tax is in order. Its just ironic that there's a higher percentage of low income smokers, so this is essentially a luxury tax on the poor. So, I like this for two reasons.

First, since poor people (and illegal immigrants) pay little or no income tax, at least the government can collect some from these groups. This is the same reason I like the lottery. I get to scratch off lottery tickets when I want to, maybe win some money, but I got to go to college for free and Georgia schools have benefited largely due to voluntary taxation through the lottery. You don't have to play the lottery and you don't have to buy cigarettes, but I'm betting if you are hooked on one, then you are hooked on the other.

Second, since poor people (and illegal immigrants) rely on social welfare programs to pay medical bills. The resulting reduction in smoking (or increase in revenue) may save on federal health costs in the long run. If you smoke a pack-a-day for a year, that $365 isn't going to go far when its time for lung cancer treatment. But, if your disposable income stays the same and you cut the number of cigs, then you may actually see some reduction in healthcare costs.

While I think it is a mistake to significantly raise a tax on an industry in this economic environment, the tobacco industry has been a punching bag for the government for years. Also, it isn't taxation without representation since they've got their lobbyists and the Carolinas, Tennessee, Kentucky, Virginia, and Georgia got to vote which represent 93% of tobacco farms in the US and 20% of the Senate and 12% of the house.

As an aside, I can't wait for federal healthcare. Eventually the federal government will tax everything bad for you that I love(chocolate, alcohol, laziness, etc) because they will have a reason to. Maybe that is just my paranoid republican coming out, but investing in the banking industry has allowed them to think they can dictate salaries and hire and fire employees. When they control healthcare costs, who knows what 'rights' will be granted to the government. But that's a whole different story.