Support Early Childhood Education: Smoke More Cigarettes

The Obama budget is finally out and there are, to no surprise, a potpourri of new tax hikes proposed, many of which are aimed at the "wealthy" among us.

Deep within the bowels of the colossal budget, however, lies a proposed tax that targets the poor among us and it is perhaps a precursor of other health-related taxes to come.

President Obama proposes raising the tax on cigarettes from $1.01 to $1.95 per pack--a whopping 93% increase in taxes. The White House estimates that the tax would raise $78.1 billion, of which around $66 billion would be used to fund pre-k education and around $11 billion used for expanded home visits and care for infants and toddlers.

Consider the impact of the tax on the taxpayer.  The 93% tax hike per pack of cigarettes affects lower income Americans far more than anyone else, making it a regressive tax.

You see back in 2009, President Obama signed into law another cigarette tax increase and according to a Gallup study done near that time, some 84% of cigarette smokers earn less than $60,000 per year, with 62% of smokers earning less than $36,000/yr. 

So, let's do a little math.  Suppose someone earns $30,000/year and smokes a pack of cigarettes per day for 365 days a year.  The federal taxes he pays in total for the year will jump to $712 from $369--leaving him paying $343 in additional taxes just to smoke.  That equates to shaving 1.15% of his income per year, a percentage of which could loom large for someone living paycheck to paycheck, as many are during Obama's presidency.

This begs the question, "Why not just ban cigarettes?"  The dirty little secret is that taxing cigarettes is easy money for the government.  Demand for the product is inelastic, as demand remains steady regardless of price since cigarettes are physically addictive.  And, since a large majority of people don't smoke, many of them could care less if cigarettes are taxed more (that's the same reasoning many are more than happy to see taxes increase on the rich since they aren't rich themselves).

The butt of this tax joke, if you will, is that much of the $78.1 billion for early childhood education would be provided by the very lower income families who receive free or reduced early childhood education. 

In other words, the more they smoke, the more goes into the early education pot.  Seems a bit hypocritical doesn't it?  That is to tax low income Americans and depend upon the revenues of a habit that is adamantly discouraged by government required warning labels on the packages of the product.

Imagine this same type of reasoning if it were used in other scenarios--taxing people who use food stamps with a special food stamp tax for education funding or adding a special tax for those on welfare to be used for government job training.  There's no way that would fly, people would be up in arms.

What could this be a preview of in the not too distant future?  Could a host of foods and beverages be next?

Sure.  Using the cigarette tax logic, it makes much more sense for the government not to ban a product like Mayor Bloomberg pushed for in New York City with sodas, and instead allow it, condemn it with warning labels, but enjoy special tax revenues by increasing the taxes on it.

Imagine the level of government bureaucracy and invasion that could occur using this same logic.  There could be a tax on too much sugar in a food, or saturated fat, maybe a sodium tax, or even an excess calorie tax.  The government could tax artificial colors or flavors, processed food...the list could and no doubt would go on and on.

All of this could be done under the guise of discouraging people from eating "inappropriate" foods, while the tax money could be used for education--the classic pull at the heartstrings by politicians to justify a new tax. 

For a true hypocritical use, the tax dollars could be applied to early childhood nutrition education.

Many will look at the proposed cigarette tax increase and shrug their shoulders in agreement, as it doesn't affect them.  But, if they enjoy the occasional Oreo cookie or bag of Doritos potato chips, their time is coming.

Chad Stafko  is a writer and political consultant living in the Midwest.  He can be reached at stafko@msn.com




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