David Kirkpatrick

February 7, 2009

SCHIP and tobacco taxes

Filed under: Politics, Science — Tags: , , , , , — David Kirkpatrick @ 11:44 am

Master blender of pipe tobacco, G.L. Pease, makes a great point on the increase in tobacco taxes and the recently passed SCHIP. One, it’s absurd on so many levels; and two, major cigarette companies were allowed to basically tax their competition (roll-your-own tobacco) out of existance.

Bad politics, bad policy and it’s based on faulty research. If you’re curious about the last bit there, do some background — the research, I think from the 60s, that all tobacco stats are based on is terminally flawed. When the government didn’t get the desired result, the stats were altered mid-stream to ensure the research was sufficiantly negative. Bad, bad science and bullshit politics. Don’t get me wrong. Tobacco is not a healthy item in large quantities, but it is not the evil it’s somehow been made out to be.

From the link:

This following mercilessly swiped table indicates the new Federal excise tax on tobacco products, along with the current taxes we all know and despise, and the proposed taxes vetoed twice by ex-prez G.W. The new rates go into effect 1st April, 2009. Fortunately, for most of us, pipe tobacco isn’t hit as badly as it could have been, resulting in a price increase of only about 20¢ per ounce. Nor have cigars, taken a serious beating, but it may herald the death of many RYO tobaccos currently on the market. Is it any wonder that Big Tobacco supported this? Nothing like taxing your competition into oblivion in the spirit of free trade.

Tobacco Product Current Tax SCHIP 2007
(Vetoed)
SCHIP 2009
(New Tax)
Tax Increase
(April 2009)
% Increase
(April 2009)
Cigarettes $0.39/pack $1.00/pack $1.01/pack $0.62/pack 158%
RYO Tobacco 1 $1.10/lb $8.89/lb $24.78/lb $23.68/lb 2,159%
Pipe Tobacco $1.10/lb $2.81/lb $2.83/lb $1.73/lb 158%
Large Cigars $0.05 ea (Max) $3.00 ea (Max) $0.40 ea (Max) $0.35 ea (Max) 722%
Small Cigars $0.04/pack $1.00/pack $1.01/pack $0.97 2,653%
Chewing Tobacco $0.195/lb $0.50/lb $0.50/lb $0.31/lb 158%
Snuff $0.59/lb $1.50/lb $1.51/lb %0.93/lb 158%

What truly amazes me about this is that the fools who author this sort of nonsense don’t seem to be able to comprehend that building social programs based on revenues derived from taxing something they’re hoping to extinguish is the worst sort of fiscal folly imaginable.