Gov 101 - It's All Smoke
I could have posted this yesterday but decided to wait a day to see if I was really outraged and to make sure I knew what I was talking about. This is a perfect example of how the Gov. works.
The Children’s Health Insurance Program Reauthorization Act of 2009 (Public Law 111-3) was signed into law by President Obama on February 4, 2009. According to MoreTobaccoTaxes.com, "This Act increases the Federal excise tax on all tobacco products and cigarette papers and cigarette tubes, effective April 1, 2009 (yesterday). In addition, the Act imposes a floor stocks tax on all tobacco products (except large cigars), cigarette papers and cigarette tubes held for sale on April 1, 2009."
Now, let's contrast that with the official Government version, "It is the purpose of this Act to provide dependable and stable funding for children's health insurance under titles XXI and XIX of the Social Security Act in order to enroll all six million uninsured children who are eligible, but not enrolled, for coverage today through such titles."
Ok, in essence that sounds all well and good. Then it goes on to explain who's covered, who's not, what's covered, what's not, how the whole thing is going to be administrated and the BILLIONS of dollars it's going to cost in coming years. Even if you have the time to read the whole thing, don't bother, it will probably just upset you and it's already been passed anyway.
But my point here is this: According the bill, CHIP is being paid for through a special fund set-up by the Treasury Dept. There's no mention of any new taxes to actually put money into this fund. They simply pushed that minor issue off onto the Treasury dept. The Treasury dept., now saddled with having to find yet another way to squeeze more cash for the citizenry decided that a good place to get all this money would be from people who purchase tobacco products. Apparently, their logic was "if they can afford to smoke, they must have lots of expendable income." As a result, steep new taxes on tobacco took effect yesterday. (see NoMoreTobaccoTaxes.com).
Now, here's where it gets really weird. Using logic that only beurecrats could cook up to "sell" these new taxes as a "good thing", they reasoned that by raising the price of a pack of smokes to $7 or more, hoards of people will quit smoking—and they probably will. This will save Billions in health care costs, and money lost to sick days (assuming these smokers haven't been laid off).
However, in order to get the tax money they need to fund CHIP, they need people to keep smoking and keep buying tobacco products. So what happens when so many people quit smoking that the new taxes just won't cover the ever escalating cost of CHIP? There's a limit to how high they can raise the tobacco tax and they'll push that limit for sure. But, at the same time, the higher the taxes, the more people will quit. So, if you are a non-smoker (as I am) and you are thinking "Well, I don't smoke, so this won't effect me." WRONG! It's just a matter of time. When tobacco taxes reach the tipping point where they no longer pay for the program, the program won't end, the money will simply have to come from somewhere else. And this is the same Gov that thinks they can run a car company.
- Robert Lindquist's blog
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