This Saturday, Fox News’s Cashin’ In did a segment asking whether a bipartisan Senate plan to raise taxes on tobacco products to fund an expansion of the successful Children’s Health Insurance Program (SCHIP) is “moral.†Fox News contributor Jonathan Hoenig called the proposal “discrimination,†analogizing it to “all blacks†or “all Christians†having “to pay a surcharge for kids health care.†He also argued that smoking “harms nobody but the smoker,†proceeding to light up a cigarette on-air to prove his point. Watch it: The majority of Americans support taxing cigarettes to finance children’s health care. The Campaign for Tobacco Free Kids reports that “67 percent favor†a 75-cent per pack federal cigarette tax increase †while only 28 percent oppose it.†Additionally, as Sen. Orrin Hatch (R-UT) has pointed out, tobacco taxes were used to fund the program when it began a decade ago. Tobacco taxes have the added benefit of discouraging smoking, which does, despite Hoenig’s rhetoric, harm more than just the smoker. According to the American Association for Respiratory Care, with every 10 percent rise in the cigarette tax, “youth smoking drops by seven percent…and overall cigarette consumption declines by about four percent.†SCHIP currently insures close to 6 million children and is considered “to be the main explanation†for why “the number of uninsured children has dropped from about 10 million to about 7 million from 1997 to 2006. The current proposal would expand “current levels of spending by $35 billion over the next five years†and “reduce the number of uninsured children by 4.1 million.†Unfortunately, President Bush has promised to veto the Senate legislation, which is being opposed heavily by the tobacco industry.
Appreciate your input fella but please try and provide a link. FOX News is all kinds of fucked up these days with it's relentless support of terrorists like Bush and Cheney. I usually prefer http://www.newshounds.us because they expose FOX News for the utter scam that it is.
As a smoker I think this tax is a good idea. Smoking harms more than the smoker, and I'm not just talking about second hand smoke. Smokers are much more likely to have certain expensive illnesses (lung cancer, emphysema, etc...) which cost everybody. Geneally speaking, the costs of treatment will be covered in large part by private insurance or medicare. The burden of this cost is then passed on to everybody else in the form of higher premiums. While I feel that all people should be helping out with this, a targeted "use" tax from a related "luxury" industry is also fair. And yes, for all of its dirty, smelly, chemical nastiness/goodness it is a luxury (not a right, not a need, not even a staple).
Do you think the tax code should be wielded like a sword? Or used to increase revenue? I believe the latter. Using the tax code to alter behavior patterns is a dark road to go down.
I don't feel it should be used to alter behavior. However, I do feel that use taxes are acceptable to combat related issues (such as a cigarette tax to bolster public insurance systems or a gas tax to help clean up the environment).
So, by using it as a weapon, you are okay if the revenues are actually lower than a sane tax policy that would maximize revenue?
you are correct...fox news is on the right...however, their news is not conservative, it is just more right than abc, nbc, cnn, msnbc, etc. Furthermore, they are the most watched news channel in the US...if that is the case, why is the US not extreme right wing? Answer: because Fox News is not. What most people like you don't realize is that programs such as O'Reilly, and hannity and colmes are NOT news..and therefore cannot be counted as such. But you probably see those as news shows, right? BTW: here is a recent source for you to read: http://www.timeswatch.org/articles/2007/20070717144258.aspx
Now you are putting words in my mouth. I didn't say anything about having a lower tax revenue, nor did I say that taxes should be used as a weapon. I did use the word "combat" as a verb, and in the context it would have this meaning (from webster's): 2 : to strive to reduce or eliminate <combat pollution> synonym see OPPOSE That does not imply the weaponization of taxes. Cigarettes have very limited value (there are some cases where it actually has medical value, but the number of cases where that applies is insignificant - except, of course, to those that rely on its treatment). They do have a devastating, measurable effect on the health and health care system of the US. I don't find anything wrong with expecting those that choose to use cigarettes pay more into bolstering the health care system up. The other alternative would be to refuse to pay for cigarette related illnesses from tax payer dollars. But what about people that suffer from second hand smoke illnesses or those that suffer from the same illnesses but don't smoke, what about those that do smoke, have the illness but it isn't from smoking? Understand, I am talking about the principle behind the question. I am not talking about the probable reality where 75%+ of the generated revenue would probably go to bureaucratic overhead. That is a whole different topic.
Let's take this a step further. Do you think taxes on food should be raised super high to bolster domestic food growing and consuming? Do you think taxes on having kids should be raised to bolster the educational system? Taxes aren't used to alter society. they are designed to raise money. If your argument is "higher taxes will mean more revenue" - then will raising taxes 20,000% on this product increase revenue? Of course not. People will simply find other means to purchase (from indian reservations or online - where they are no taxes on such items). A far better solution would be no tax payer dollars for illnesses. Pay as you go, for yourself. Private insurance, paying for things for yourself - those antiquated notions. I don't argue whether cigarettes have secondary effects. They do, but that, also is a different topic. This topic is about whether or not raising taxes 20,000% will increase revenue to pay for "children's health" Will it? Of course not. In other states that have exorbitant cigarette taxes, revenues went down. There is a point at which revenue is maximized with taxes and other when its just punishment. This is punishment, clearly.
Taking part of the argument and trying to obfuscate the issue by ignoring the rest of the statement are we? Food and children have beneficial effects on society. Cigarettes are hardly food or children. People need food to live. Society needs kids to perpetuate itself. I need cigarettes so that I don't shoot commuters, but beyond that.... Where does 20,000% come from? Have you bought a pack of cigarettes lately? In the lowest taxed states the current tax is 46 cents (39 federal 7 state - SC). That hardly adds up to 20,000%. Or were you just trying to be dramatic because it was more effective than factual evidence? As for lost revenue, care to provide a link? Here's one that contradicts your argument. tobaccofreekids.org/research/factsheets/pdf/0098.pdf This study shows that states that significant raises in the cigarette tax have always gained more tax revenue (even with declining consumption and reduced pack sales). Here's one that shows California's tax increase did not lead to a significant number of tax avaoiders. tobaccocontrol.bmj.com/cgi/content/full/11/2/130 In addition, we are talking about a federal excise tax, not a state tax. Even cigarettes munfactured (not just sold) on Indian land are subject to the Federal excise tax. atf.gov/press/fy06press/021406atf-ttb_tobaccosettlement.pdf So the tax will be hard to avoid. That just leaves bootleggers which might be a problem in New York City, but that could be solved by dropping them into the Atlantic (j/k). Bootlegging is not nearly as significant as the tobacco companies would lead you to believe. Read the above links. There is a reason they're antiquated. Not paying for health care will cost society much more in the long run than not. Loss of productivity, etc.... Name one country that pays nothing for health care and is doing well (both financially and socially). I'm not saying universal health care (again, different issue) but we can't realistically expect to pay nothing. Again, post a link that shows an actual decline in revenue over this. And it better not be a link where they show that the actual revenue was less than the anticipated revenue because some idiot didn't account for lower sales. I mean where the cigarette tax revenue was less the year after the tax was established than the year before. And where does that 20,000% come from?
This is about cigars. Cigar taxes are going up 20,000%. Cigarette taxes have already been raise previously; and they are taxed under different rules. http://www.sptimes.com/2007/07/17/Business/Cigarmakers_in_a_pani.shtml That's a 20,000% increase. I'm surprised you need links to decreased revenue because of tax increases. It's common sense: http://www.msnbc.msn.com/id/17170991/ http://www.rutlandherald.com/apps/pbcs.dll/article?AID=/20070701/OPINION03/707010318/1039/OPINION03 http://tobaccodocuments.org/ai_news/10985.html Need more? It's all common sense type stuff. When you raise the price of doing something, less people do it. There is a happy medium somewhere. But a 20,000% tax increase is not it.
Left out the other issues? In debate we called that conceeding the point, but let's move on. Okay, I see where you came up with the number, but it is very misleading. The rate would change from a set fee to a percentage based fee. A cigar would have had to cost $19 to see the maximum tax of $10. That means the tax is not going up 20,000% overall on cigars. It is going up that much on a small portion of the cigar market. That being said, it seems like a lot but it is more in line with what the cigarette tax would be. I'm not sure that I think that large a jump all at once is a good idea though. You say common sense, but the factual numbers disagree with you. Yes, over time revenue has decreased, but not directly because of tax increases. In fact, without tax increases revenue would be less than what it is at today. The declining number of new smokers has much more to do with education about cigarettes and public smoking restrictions than tax increases. This link talks about worries of tax losses, but shows no evidence that taxes have by themselves reduced tax revenue (in fact state budgets show the opposite). You also forget to mention the revenue not spent on medical expenses. This "article" from the executive director of the National Association of Tobacco Outlets actually has numbers in it, but they are projections. And it doesn't say over what time. Also, what are the projections without the increase. Do they show increasing revenue or a higher loss? I suspect a higher loss of revenue if the tax is not increased. The part about increased illegal activity has no numbers in it. Speculation and arguments made without evidence have no value. The problem with common sense is that it is common (which does not mean true) and that it requires sense. Yes, higher prices likely mean fewer people doing it. However, higher per charge taxes end up resulting in a net gain in revenue even though smoking rates are on a national decline (even in states that have not raised tobacco taxes for years). The issue with this link is again that it is deceptive. The Florida tax increase to 34 cents occured in 1990, nine years before the decrease in revenue. Jim Lacross from your quote speaks of the price increases imposed BY the cigarette manufacturers, not ON the manufacturers. People are more willing to pay an increased price if it is a tax for a specific reason than a price increase to pay for corporate lawsuits. Cigarette smoking is on the decline, but it is not mainly from price increases. It has to do with public education, advertising limitations, and public disdain for the big players in the industry.
You can spin it how you like. A $1 cigar is going up to $11. Yes, a $10 cigar would go to $20. It's upwards of a 20,000% tax. Spin it if you want. But you can expect businesses to be closed because of this tax. People will consume less of the product because of it. Remember when a luxury tax was installed in 1991? http://scholar.lib.vt.edu/VA-news/VA-Pilot/issues/1995/vp950618/06170274.htm The idea was to make "rich people" pay more for products to help get more money to the treasury. Didn't work did it? Revenues declined. If you are seriously in support of "taxes to help children's health" you'd look at a more reasonable tax to raise money, instead of a sword designed to chop businesses apart. There are real people, real jobs that get affected here. Yes, I agree. It is hard to make a 100% correlation between high taxes and less people using - in this case in particular. But the converse is true as well. You cannot 100% claim that more education led to the decline either. The higher taxes no doubt had an impact. To try and say - it didn't matter - is naive. It never is. The money is meant for one use when it comes out of a politician's mouth, then used for something entirely different in reality. Congratulations on making another fine point for me Yeah; it's really hard to make the argument that every year since the taxes were raised revenues declined on those same taxes. It's tough to see. But it's there. You suspect. I'm showing you how revenue -has- dropped. And you are suspecting something? Come on now. You are assuming facts by ommission. Florida's tax revenue from cigarette taxes has been declining since 1992. http://www.fairtaxflorida.org/fpb1.pdf The graph on the right is a wonderful example of how a tax increase decreases the overall revenue; each time taxes were increased. You can continue to claim "its partly education" - but then you have to admit the striking coincidence of how quickly people get "educated" whenever taxes are increased.
Now who is spinning. As I said, the tax wou;ld move from a flat fee to a percentage of 53% with a cap of $10. That means a $1 cigar would cost $1.53 not $11. A $10 dollar cigar would cost $15.30. A cigar will have to be close to $19 before seeing the cap of $10. Those numbers are not quite accurate either as the 53% would be based on the list price, not the taxed price (which would results in lower numbers than I show). People will still buy cheap cigars to roll their blunts in, and people buying expensive fine cigars will still buy expensive fine cigars. I can expect businesses to close because tobacco is a dying industry in this country regardless of tax increases. Regardless, I was just pointing out that the information you provided was represented incorrectly. As I already mentioned that I probably think that is too large a jump at one time, I will not argue this point. That had a lot more to do with the declining economy than the tax (not that the tax helped). However, your again comparing apples to oranges. Comparing $100K yachts to packs of addictive sticks that cost less than $10 per pack in the most expensive city is hardly an accurate portrayal of events. This is a product with a long history of fairly significant tax increases. History has shown that the year following a significant tax increase on cigarettes has always lead to an increase in revenue. Which people are we talking about? Taking cigars out of the equation (see above), are you referring to the multi-billion dollar corporations that will continue to sell billions of cigarettes in the US alone and continue to make billions on cigarette sales? Or the multi-billion dollar corporations that have continually contrived ways to make their product more addictive than any drug peddled by a street-corner dealer (there is some debate over whether crack or meth might be slightly more addictive)? Perhaps it is the multi-billion dollar industries that cause 440,000 premature deaths and $75 billion in health care costs each year (drugabuse.gov/Infofacts/Tobacco.html). Maybe you're talking about the Native Americans whom you say will see increased sales. No? That leaves us with the farmers. The industry is dying without this tax. They need to find a new product to plant. That's the beauty of farming. Actually, it is not that hard to determine. Compare the decline rate of cigarette usage over the years where taxes did not increase to those where there was a tax increase. Yes, sales do drop after a tax increase. However, the topic was whether this would have an effect on tax revenue. It doesn't. When Virginia increased tax 54% they saw an increase in revenue by $60.5 million. When they increased the tax 593% (over 10x) one year later they saw another increase of $95.4 million. To say that we should continue to let 440,000 people die and spend $75 billion on health costs is short sited. I'm not sure what point I made for you here. In 1997 $37 billion in tax dollars was spent in the US to pay for smoking related illnesses. That's more money than cigarette taxes brought in. So in the highly unlikely event that taxes price cigarettes out of existence, we still end up on top. Now, if you are referring to my first post, sad but true. However, that is a different issue than the effectiveness or ethicality of an excise tax on cigarettes. Again, show an example where cigarette taxes have declined the same year they went up. You can't because the revenue always increases. What you have shown is that revenue has been declining over time due to an overall drop in smoking. You have not shown one instance where the revenue has dropped because of a tax increase. Nationally, smoking has been on the decline since 1974 (dwp.gov.uk/ofa/indicators/indicator-24.asp). No assuming and no omission, but you have left yet another misrepresentation. The graph shows the tax revenue in comparison to the overall budget. It does not show that the actual revenue amount decreased. If you look at the chart above it, you will see that there was a sharp decrease in packs purchased before the tax. Consumption actually started to increase shortly after the tax was in place. Increased consumption and an increased tax equals higher revenue. Oh, and compare consumption rates with the two other tax increases shown on the lower graph. Consumption rates continued to climb steadily after those tax increases. Education and public bans have much higher success rates in causing smoking declines (and last longer) than taxes. ---------- “Total prohibition of smoking in the workplace strongly affects industry volume. Smokers facing these restrictions consume 11-15% less than average and quit at a rate that is 84% higher than average… Milder workplace restrictions, such as smoking only in designated areas have much less impact on quitting rates and very little effect on consumption.†—Philip Morris (1992)
That alone, makes the tax unjust doesn't it? Should taxes be used as a weapon? Earlier it's no. Is it a yes now? In the short term. In the long term, people find ways around the tax laws. They either go to states that do not have high taxes, they buy them online overseas of find people who have gotten around the taxes. I'm not comparing apples to oranges. I'm drawing the point that increased taxes results in less people doing the thing is taxed. And that it harms businesses. You've already agreed with me on both points, so where are the apples or the oranges? I'm not talking about Philip Morris or any of the other cigarette demons. I'm talking about cigars - and you this. why are you obfuscating with what PM does or did? You make it sound so simple, don't you? You expect farmers to cut down years worth of crops because a tax increase has harmed their livelihood. More taxing as a weapon, eh? I don't smoke, so I don't care what happens to tobacco farmers, so that's besdies the point. But I do not believe that taxation should be used to cut down an activity that is perfectly legal, in the eyes of the law, do you? We should let? We should let people have a choice of how to run their life. If people want to smoke, let them. If they know the risks - I fully support the right to be stupid. As I've already shown. It may not happen the same year, it happens in following years once people see the impact. It's not really that hard to see. It does show exactly that: Too bad it didn't, though. Quote above. Revenue dropped off after increased tax. I forgot to mention. FL is in a unique position (possibly) to show this point quite well. Florida is full of indian reservations, where you can buy cigarettes tax free. Since these reservations are everythwere (it seems) in relation to major cities (outside tampa for me, about 10 miles away). It's easy to skirt the tax here. I'd be very interested to see a stat - sales of cigarettes on reservations compared to tax increases. I'd suspect that'd but this thing to bed entirely and I bet the results would be very predictable. That's counter to the point, though is it? If you are trying to use cigar/cigarette taxes to pay for children's health (as the ostensible goal), the actual point is to increase use isn't it? But it's exactly the opposite, cigar/cigarette taxation is claimed to have a goal (paying for health of kids - always the kids, of course), but it's real goal is to force people off the habit by making it unaffordable. And that's the point I keep making - which you seem to agree with me, at least in part, based on a few of your responses here.
No, it doesn't. Just because it is a dying industry anyway doesn't mean the government should bolster it up. Nor does it mean the government shouldn't tax it. Nor have I implied that it should be used as a weapon. The beneficial side effects of lower smoking rates is just icing on the cake. Well, since this is a federal law and even the reservations will be subject to the tax, that leaves bootleggers and overseas. But let's look at the numbers. The studies in the links I provided earlier showed that even including reservations and state crossings the amount of diverted tobacco sales was about 10%. Let's assume 20%. The cigarette tax will increase a little less than 200%. I don't have the cigar numbers, but let's assume it averages to 200% on cigars. With an increase of 200% tax it would take more than an additional 67% of smokers to quit or move to bottleggers to cause a decrease in revenue. To see how this works: Let's say the revenue generated is $100 (not even close, I know). If we increased the tax 200% and usage stayed at the same level the following year would see the overall revenue at $300 (100 that was received at the previous tax, 200 from the increase). To see a decline, there would need to be $201 less than the anticipated $300. 201/300 = 67% Nearly 70% of smokers are not going to quit, die, or seek cigarettes elsewhere. Most people will walk down to the corner store. Now, let's assume that 20% of smokers do and that 20% continue to do so each year. Let's assume a 1% decrease without the tax. Smokers are quitting regardless. South Carolina has seen a steady decrease of tobacco use even though they have not adjusted taxes since 1977. Year 1: w/Tax $240.00 wo/Tax $99 Year 2: w/Tax $192.00 wo/Tax $98 Year 3: w/Tax $153.60 wo/Tax $97 Year 4: w/Tax $122.88 wo/Tax $96 Year 5: w/Tax $ 98.30 wo/Tax $95 Year 6: w/Tax $ 78.64 wo/Tax $94 Given those numbers, it would take six years to see fewer taxes than you would from not having the tax. Five years if there were no decline without the tax. It would take twelve years for the total tax that is collected to be heavier on the side without tax. There has never been a sustained reduction of 20% each year. You Florida chart shows a fluctuation of less than 14% over the last 20 years. My example would mean a deacrease of almost 98% in fifteen years. Take into account actual sales declines and the math would show that increased tax results in increased revenue regardless of fewer sales. You use one example that is not about tobacco, rather very expensive purchase price items that were not able to be paid for by people who suddenly found themselves not to be worth as much as they thought during a recession. Let's see, small daily or weekly purchase compared to the effect on a product that most americans couldn't buy with an entire year's salary. In the middle of a recession. A luxury item and an addictive substance.... I see the similarities now. Talking about how tax increases altered egg sales, that would have been a little closer. I agreed that higher taxes can lower sales, but since the issue was whether tax revenue would increase it is irrelavent. Your Florida chart shows that taxes do not always lead to a decline in sales. It shows a per capita decrease, but that doesn't mean people who smoke smoked less. It could simply mean the population that was moving into Florida didn't smoke. Tax can harm business, but doesn't always. Given the nature of the business (either tobaocco or luxury boats), I'm not that concerned. Just because a business exists, that is no reason to keep it around. Lastly, that article gave the tax as a factor. I didn't see anything about how much it contributed. Given the small number of sales we are talking about, it should have been easy for them to determine how many people would have canceled their sales (sails?) even without the 10% tax. Actually, first you were talking about using taxes to generate higher revenue (which this does). Then you got into the 20,000% thing in a sentence about cigarettes: After I respond you mention cigars for the first time (4th post). Since the legislation is about all tobacco, I thought I would cover my bases. Big cigarette tobacco is also a pretty big player in the cigar market. Tobacco companies big and small are poison peddlers. I'm not obfuscating anything. Cigars cause cancer and other illnesses as well. Years of crops? Tobacco is not a tree. They are harvested at the base of the stalk and the roots are ground into the soil. Or did you mean they had been growing tobacco for years? Well, all the other farmers change crops when the bottom drops out of the market they farm for. That's the way of farming when you don't have the tobacco lobby behind you. And still with this weapon stuff. I do smoke, and I do care what happens to the tobacco farmers. The fact is that sales will continue to drop without a tax increase (its been doing so for 30 years nationwide). At best not having the tax would buy them a few more years. If there are too many growers, then some of them need to find other work. The sooner they adapt, the better off they will be. There are plenty of emerging technologies that use plants. They should get in on those before that market gets saturated. Do I think that taxes should be used to cut down a perfectly legal activity? If by perfectly legal you mean partially banned in many states and not allowed in Federal and State buildings, and if by cut down you mean slightly reduce usage of then I think it is an acceptable side effect. If I had the power to vote on this I wouldn't vote no just because there would be an effect on some people, but that is not why I would choose to vote yes either. If I voted no the effects and costs would be greater. By your logic, I should vote yes because the benefits outweigh the negative. The reality is people should be accountable. Yes, people should have the right to choose. But freedom doesn't mean everything is free. You can make the choices you want, but you should be willing to pay the price. Actions have consequences. That's life. That statement shows that revenue started dropping from the previous year seven years after the tax was hiked. That does not mean that the revenue was less than it was or than it would have been. Let's go back to the charts and some math. Looking at chart 1, lets take the high point (which is two years before the tax hike) in 1988. The chart shows 1,470 million packs sold. The tax rate at the time was 24 cents. The revenue would have been $353 million. The revenue at the end of the seven year decline was $418 million. So, Florida would have had to buck the national trend of declining sales since 1974 and see an increase of 18.4% in usage to see that same $418 million dollars that came at the end of the seven year decline (also note the increase in packs sold on the chart for 2005). In 1990 when the tax was hiked the pack sales were 1,380 million packs. At the new rate of 33.9 cents the revenue would have been $467.82 million. That would require a growth of 32%. Yes, $418 is less than $467, but it is still more than $353. This chart shows a drop in pack sales over time, with the largest drop spanning both sides of the last tax hike (right about the time the economy was bad and tobacco companies were being taken to court left and right). The hike before that saw a significant jump in sales the year after the hike. The hike before that saw steady growth (with a total growth in sales of 30%) in sales over the next decade. What it also shows is an increase in revenue. Florida is in not that unique position. Lots of states have lots of reservations. Besides, as this is a Federal tax, they won't be exempt (see link in previous posting). On top of that, the link you provided shows that history does not bear out your assumption that higher taxes equal lower revenue. Even in the unique state of Florida. No, it is not counter to the point. The point would be to achieve a balance, where the taxes actually bring in at least as much money as they cause in tax losses. The tax we get from cigarette taxes is less than is spent by the Federal government for direct health care costs, not to mention indirect cost (and the even more enormous cost paid by private health care insurance). I don't think that the point is to reduce smoking. That may be some people's agenda, but I don't see it that way. In a representative democracy, not all people that come to the same conclusion will come to it for the same reason. I agree that it will cause fewer people to start and more people to quit than are already, but that is a side effect. Everything you do has multiple effects on the surrounding world.