another comment on the family smoking prevention act.

Remember President Obama's promise not to raise taxes on anyone making less than $250,000 a year? What he meant to say was no raises via federal income tax. Unless you have been living in a very remote country or under a really huge rock, you know that our politicians have lots and lots of ways to tax us. The recent increase in the federal tobacco tax is going to be paid by smokers unless they decide to quit. Incomewise, guess who does most of the smoking??? If you say the poor and lower middle class people, you can move to the front of the class. Let me quote Jane Gravelle, senior specialist in Economic Policy Finance and Government Division of the Congressional Research Service. (yes, the US Congress's research service)

It is generally recognized that cigarette taxes are one of the most regressive taxes, that is, a tax that falls more heavily on lower income individuals as a percentage of income.

At first glance, it seems President Obama is defeating his own goals by putting a very regressive tax on smokers. Bear in mind, this report is dated June 19, 2007 before that latest excise tax increase. I then had an epiphany moment. The rationale for the tax increase was to fund the State Childrens Health Insurance Plan. So, the smokers are actually helping to insure their children. Around here, Marlboros went from $4 and change to $5.25 to $5.60 a pack. I am sure poor people have no problem ponying up the extra money knowing it funds their kids health insurance. Way to go President Obama and Congress!!!

To read Ms. Gravelle's report go to http://opencrs.com/ and put order code RS22681 in the search box. The name of the report is "The Cigarette Tax Increase to Finance SCHIP".