Blowing Budgetary Smoke

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker, financial journalist, and money manager.

By Jim Woods

In America, hating a minority group is generally considered a vile act — unless, of course, the minority group you hate is smokers.

Forget the fact that smoking tobacco is something humans have been doing for approximately 18,000 years, when migrant Asiatic people first crossed the Bering Strait and came to what is known today as the Americas, where tobacco is a native plant. Today, smokers are a hated class of people who face a gauntlet of laws restricting their freedom of choice as to where and when they can light up.

The latest ding on smokers comes to us straight from the Oval Office. According to the White House’s 2014 federal budget proposal, President Obama plans to increase taxes by $580 billion over the next decade. Part of the way Mr. Obama gets this added largess is via a 94 cents-a-pack increase in the cigarette tax. That new tax would raise an estimated $78 billion during the next decade and, according to the president’s budget, that money would be used to pay for an expanded early childhood education program.

Ah yes, whenever the tentacles of the federal leviathan want to confiscate more of our money, and more of our freedoms, they often do so in the name of the children.

Combine this increased levy cloaked in the guise of helping our kids attend preschool with the fact that it’s being slapped on everyone’s favorite hated class, smokers, and you get a prescription for a tax that most people probably feel is reasonable.

Well, I am not one of those people.

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Before I continue, I must say that I am not a cigarette smoker, and I never have been one. And though I do smoke tobacco products via a few cigars each month, this in no way influences my objection to this blowing of budgetary smoke by the president.

My disdain for this tax on smokers to fund bigger and bigger government has nothing to do with smokers, and everything to do with freedom.

I want to know by what moral right the president, or any lawmaker, has to punish a class of people, who choose to engage in a legal activity, by taxing it to fund another activity that they think is of greater societal good. Moreover, the last time I checked, having children and sending them to preschool is a choice made by parents. By what moral right does the government punish one choice and reward another?

Now, aside from the immorality of this punishment of smokers, if we look at the practical consequences of this unfair duty, we see that what it basically amounts to is a tax on Americans at the lower end of the economic spectrum.

According to a report by Fox Business News reporter Dennis Kneale, half of all smokers in the United States earn less than $25,000 per year, almost 30% of all smokers have incomes below the poverty level, and one third of all people in the country who earn $12,000 a year or less are smokers.

What this situation means is that the people who least can afford to pay more taxes are going to be the ones hit hardest by this new social engineering scheme.

Exclusive  Fill in the Blank: America Faces a _____ Nightmare

As Kneale put it, “President Obama makes a big deal about wanting to soak the rich who don’t pay their fair share, and not raise taxes on anyone else, particularly not on the poor. And yet this is a president who, if he gets his way in this budget, he will have raised [federal] per-pack taxes on cigarettes 400% in four years.”

I guess the way the president sees things, it is okay to punish lower-income Americans — provided they smoke cigarettes — as long as it is in the name of the collective good of the children.

Follow Jim on Twitter: @Woodsish.

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