will taxing smokers or cola drinkers more help the economy?

[karyn]

from msnbc

Opening act for Congress: raising taxes
A tax increase on smokers soon, and tax hikes on others in 2011

By Tom Curry
National affairs writer
msnbc.com
updated 3:28 p.m. PT, Thurs., Jan. 8, 2009

WASHINGTON - While tax cuts are an integral part of President-elect Barack Obama’s stimulus plan, the newly convened Congress and the incoming commander in chief are nonetheless preparing for a tax hike.

House Majority Leader Steny Hoyer announced Wednesday that the House will vote next week on expanding the State Children’s Health Insurance Program, which will be funded by an increased excise tax on cigarettes and cigars.

A tax increase may seem counterintuitive in a recession — especially since Obama and congressional Democrats are simultaneously touting tax cuts as part of the cure for the ailing economy.

But its likely to be down played as a tax increase only on smokers, who, according to the Centers for Disease Control and Prevention, comprise roughly one-fifth of the population.

A spokesman for the House Ways and Means Committee said this bill mirrors the one passed by Congress in 2007, and subsequently vetoed by President George W. Bush.

A 156 percent tax increase
The legislation would impose a 156 percent tax increase on smokers, raising the 39-cents per pack federal cigarette tax to one dollar.

The Congressional Budget Office estimated that the bill passed in 2007 would have raised about $53 billion in revenue over ten years.

But it will be a relatively small tax increase compared to the tax cuts that Obama has proposed — those may end up amounting to more than $300 billion over two years.

The tax increase is also tiny compared to the projected $1.2 trillion deficit in the 2009 fiscal year.

But will Democrats also raise taxes on other demographic groups? They've yet to say if non-smokers will be targeted.

In an interview with CNBC’s John Harwood on Wednesday, Obama said that he had not made a decision yet as to whether he will ask Congress to raise taxes this year on people making more than $250,000. He's also pondering waiting until the end of 2010 when the current income tax rates expire.

If Congress does nothing before the end of next year, income tax rates will go up and most Americans will face tax increases — and for some, they'll be significant.

Next year is an election year for a third of the Senate and all House members, so Congress could potentially be voting on a large tax increase right before, or perhaps just after, the 2010 election.

“That issue is going to have to be addressed sometime over the next year,” said House Minority Leader John Boehner on Thursday. “The first thing we have to do is get through this next month in determining what this economic rescue package is going to look like, how big it is, and what’s its made up of. The president has his budget submission in early February — and so we’ll have plenty of time to deal with that (2010 tax) question.”

But the 2010 ball is in the Democrats’ court.

House Speaker Nancy Pelosi opened her briefing Thursday with a pledge of “fiscal discipline.”

Raise taxes on those over $250,000
In response to a question about the tough tax decision she and the Democrats face next year on taxes, Pelosi quite forcibly said, “Put me down as clearly as you possibly can as one who wants to have those tax cuts for the wealthiest in America repealed.”

When asked at what income level she’d repeal the 2001 and 2003 tax cuts she said, “That number will be determined. But we have talked in the $250,000, $300,000 range.”

She added, “Put me down as one in favor for repeal as soon as possible.”

The CBO forecast about the shrinking size of the deficit in future years assumes that Congress does not “fix” the Alternative Minimum Tax, as it's been doing recently to prevent a biting of the middle class.

Harsh bite of the AMT
The AMT is a parallel tax system originally designed to ensure that high-income people did not escape taxation. But since the AMT is not indexed to inflation, each year it affects more and more people who think of themselves as middle class.

And the AMT has an especially harsh bite in states such as New York and California with high state income taxes.

Democrats will need to decide what to do about income tax rates and AMT.

Hoyer vowed Wednesday that “we are going to pursue… getting us back to a place of fiscal balance by executing fiscally responsible policies. That obviously will not be possible in the short term, given the deep distress our economy is in…”

"Republicans proceeded over the last eight years as if deficits didn't matter. They didn't want to pay for AMT, they didn't want to pay for the war, they didn't want to pay for other things they pursued...Deficits matter."

Financial markets willingness to believe in credibility of Democrats commitment to fiscal balance depends on the Democrats’ answers to those tax questions.

But the cigarette tax points to one way to raise revenue without broad hikes on middle-income workers — increase duties on undesirable activities and products.

How about, for instance, a federal excise tax on sugar-sweetened beverages? A recent CBO study of various health care policy options says there is more than $50 billion in revenue over ten years to be gained from taxing soft drinks.

The problem, of course, is that cola drinkers can shift to non-taxed liquids, such as apple juice or ice water.

And while $50 billion in revenue may seem like a large amount, it is really quite small compared to the $3 trillion in deficits which the CBO forecasts from now until 2019.

[Buster Friendly]

Tax High Fructose Corn Syrup out of existence.

[Ajax Knucklebones]

If they want to be fair, why not tax alcohol more instead of cigarettes. Isn't alcohol intake seen as an undesirable activity? Wouldn't an alcohol tax effect EVERY income class? Hmmm...Maybe it's because the same people that complain about smoking in bars would flip the fuck out if they were taxed more on that booze they buy from those drinking establishments. Smokers are going to get taxed more and more forever because we are now a minority and so we're fucked. We can bitch and moan, but since there is only 1/5 of us in the population nobody will ever give two fucks. I always like the double standard when it comes to drinking and smoking. Smoking is a nasty habit. Drinking, on the other hand, well...It's a social thing....Because so many people do it....So it's not a nasty habit. Yet, really, is drinking so much more of a healthier thing than smoking? I bet the slew of women that got the shit kicked out of them from their drunken husbands last night would say different. But hey, maybe these women now don't have to worry about second-hand smoke because a can of beer is alot cheaper than a pack of smokes, so their husbands only drink now instead of smoking.

[Buster Friendly]

What the fuck does any of that have to do with soft drinks Ajax?

And- Haha smokers! You guys will get taxed whatever the fuck we say because you're addicts!

[Mr Karl]

taxes are good..........

[Ajax Knucklebones]

What the fuck does any of that have to do with soft drinks Ajax?

And- Haha smokers! You guys will get taxed whatever the fuck we say because you're addicts!

Nicotine flavored drinks, of course.

The first few paragraphs of the story has to do with the raising of cigarette taxes. Chill yourself, Slappy!

[Morning Glory]

sure thing. just keep raising the prices until everyone stops smoking. the economy will rebound with the spike with the short term sales until it finally stabilizes and you'll have a healthy and longer living, more productive population and it will save on all the medical expenses related to smoking that are unpaid for and passed onto the tax payer.

and then Big Tobacco will bitch about it and the government will give them a trillion dollars and the market will crash back into a recession again.

[athenahollow]

sure thing. just keep raising the prices until everyone stops smoking. the economy will rebound with the spike with the short term sales until it finally stabilizes and you'll have a healthy and longer living, more productive population and it will save on all the medical expenses related to smoking that are unpaid for and passed onto the tax payer.

and then Big Tobacco will bitch about it and the government will give them a trillion dollars and the market will crash back into a recession again.

Are you kidding me?
In 2006, smokers paid 14,974,713,000 in state and local taxes, according to http://www.taxpolicycenter.org/taxfa....cfm?Docid=403.

That's not including any federal taxes that were ALSO added on.
If everyone stops smoking, the economy will not spike, in fact, it will probably drop even more than it has recently. That's 14 BILLION DOLLARS for fuck sake. In pure tax.

{edit} And I suppose it was possible you were being sarcastic. But it just didn't seem like it tbh. Just covering the bases

[Raza]

The money all those smokers spent on tobacco wouldn't just disappear though. Presumably it'd get spent elsewhere, and be taxed there.

Besides, you're measuring smokers' value to the economy in tax income to establish that smoking shouldn't be discouraged by taxing it more. I don't even want to get started on all the logical interdependencies in that argument.

[Morning Glory]

{edit} And I suppose it was possible you were being sarcastic.

I wasn't being sarcastic, but I wasn't exactly being serious either. I think that it made sense in a logical way, which isn't to say a practical one. the point is that we would all be better off if people did not smoke, but as we both saw, the economy would suffer because it makes too much money.

[athenahollow]

The money all those smokers spent on tobacco wouldn't just disappear though. Presumably it'd get spent elsewhere, and be taxed there.

You are right, it would get spent elsewhere, but it wouldn't be a 300% taxed item. So that money wouldn't go directly the economy, and instead would mostly go towards the cost of the items in question. I honestly can't think of anything that's already taxed to death like tobacco is. But sure, let them raise the taxes. And when everyone is forced to quit because it costs to damn much, I am going to stay home and watch the train wreck.
Have you ever seen what happens when you get 2 lifetime smokers in the room together after they haven't had a smoke in 24 hours? Imagine that x2mil/city. minimum.

[LeilaHazlett]

If they want to be fair, why not tax alcohol more instead of cigarettes. Isn't alcohol intake seen as an undesirable activity? Wouldn't an alcohol tax effect EVERY income class? Hmmm...Maybe it's because the same people that complain about smoking in bars would flip the fuck out if they were taxed more on that booze they buy from those drinking establishments. Smokers are going to get taxed more and more forever because we are now a minority and so we're fucked. We can bitch and moan, but since there is only 1/5 of us in the population nobody will ever give two fucks. I always like the double standard when it comes to drinking and smoking. Smoking is a nasty habit. Drinking, on the other hand, well...It's a social thing....Because so many people do it....So it's not a nasty habit. Yet, really, is drinking so much more of a healthier thing than smoking? I bet the slew of women that got the shit kicked out of them from their drunken husbands last night would say different. But hey, maybe these women now don't have to worry about second-hand smoke because a can of beer is alot cheaper than a pack of smokes, so their husbands only drink now instead of smoking.

I don't smoke and I don't much care for being around a lot of smoke but it really does seem like smokers are getting unfairly targeted these days. I think it's stupid that people can't smoke in bars. The owners of the bars should be able to decide weather or not they want people smoking there, not the government.

Also I don't see how it's fair to have such a high tax on something people are addicted to. It's not going to stop them from smoking, just make them poor.

The government should just start selling weed.

[Morning Glory]

sounds like a good time to me. They can film it for a Fox reality show. Put 50 people together in a cage match and let them fight to the death for a cigarette.

How are smokers treated unfairly? they can go down to every corner store and buy their products, all things considered, relatively cheaply. I don't get to smoke my crack rocks at the bar, I have to blow some guy in an alley... why shouldn't tobacco consumers fare the same way?

I'm all for private liberties, do what you want to in your own home, but once you step outside, you have to share the world with other people that might not enjoy your habits.

[athenahollow]

sounds like a good time to me. They can film it for a Fox reality show. Put 50 people together in a cage match and let them fight to the death for a cigarette.

How are smokers treated unfairly? they can go down to every corner store and buy their products, all things considered, relatively cheaply. I don't get to smoke my crack rocks at the bar, I have to blow some guy in an alley... why shouldn't tobacco consumers fare the same way?

I'm all for private liberties, do what you want to in your own home, but once you step outside, you have to share the world with other people that might not enjoy your habits.

Well then I think that people should have to chew with their mouths closed or get fined. I mean, I have to be in public with them when they eat. And that bothers me a LOT. So why can't I have that as well?

Or how about those people who dress their dogs up in stupid clothes? Those people give me rage like you wouldn't believe. It's an animal, not a child stupid. And I've seen these people dress these animals, and it nearly always ends up in the animal fighting it as much as possible. They obviously don't like it. And since it makes me angry, it's stopping my pursuit of happiness. So let's raise the taxes on animal clothing now...

[soma_stardust]

If they want to be fair, why not tax alcohol more instead of cigarettes. Isn't alcohol intake seen as an undesirable activity? Wouldn't an alcohol tax effect EVERY income class?

word.
drinking is just as destructive, but more socially acceptable. tax that shit and leave the poor smokers alone. it's already taxed to death.

[Jax]

Drinking, I feel, is way more destructive than smoking. I mean, how many people get into accidents because they had a cigarette? Haha...

[aXa]

Drinking, I feel, is way more destructive than smoking. I mean, how many people get into accidents because they had a cigarette? Haha...

i know of one. but it wasnt so much the cigarette he had just lit as the fact that he managed to set the ointment on his hand aflame, that was what really caused the accident.

[Toe Cutter]

I think we should be taxing Religion and churches!

I call religion the losers vice!

[nathanmbailey]

Drinking, I feel, is way more destructive than smoking. I mean, how many people get into accidents because they had a cigarette? Haha...

I've been in a few accidents caused by other people not paying attention because they were trying to light their cigarettes. But they were total idiots. A bic isn't going to light a smoke when you have the windows down and are on the highway. There's a reason for cigarette lighters. Oh, wait, most car companies are getting rid of those and just making the damn things auxilary power receptacles with a non-igniting cover. But of course, alcohol related accidents tend to occur more often with much more destructive results.

I was pissed when Illinois banned smoking in public spaces except for privately owned areas. I know people who don't smoke but when they're drinking they want a damn smoke. It's A FUCKING BAR! Unless you're sitting in some small unventilated bar, you shouldn't even be able to notice. Besides, leave it to owners and I'm sure there would be some smoke-free bars. Restaurants on the other hand, I kind of understand.

As far as tax, it's bullshit. The stuff's already expensive as hell. The saddest part is that the American economy was essentially started by tobacco. It wasn't like they had much else to fucking sell to other countries. There are major colleges named after tobacco plantation owners, so why is it all of a sudden, smokers are hated so damn much? Keep taxing them so that we can't afford them easily, we'll start breaking into people's houses to get the money for them.

[Morning Glory]

So why can't I have that as well?

ah, but you see, this is where the whacky world of politics comes in. It's not up to you and me to decide what laws we want. It's some other crazy asshole, and apparently he doesn't like cigarettes.

But i'm totally with you on those things. get a petition going to your congressman and I'll sign it.

[Ajax Knucklebones]

ah, but you see, this is where the whacky world of politics comes in. It's not up to you and me to decide what laws we want. It's some other crazy asshole, and apparently he doesn't like cigarettes.

But i'm totally with you on those things. get a petition going to your congressman and I'll sign it.

Please....The population doesn't like cigarettes. The fucking government LOVES them. They make a shitload of money off of them. Think of not just all that tax money but the bigtime tobacco lobbyists that hand politicians wads of cash for "favors". The reason why the politicians are doing what they do now isn't because, they themselves don't like the tobacco companies. It's because the non-smoking majority of the population doesn't like smoking and clamors for politicians to do everything they can to stop people from smoking.

[Morning Glory]

So you're telling me that the voice of the people has drowned out the greed of big business and democracy does in fact work?

why don't I believe it? I like my "crazy asshole" theory better. Most likely a powerful minority of crazy assholes, such as the mormon church or scientologists are the one's behind it.

[athenahollow]

Please....The population doesn't like cigarettes. The fucking government LOVES them. They make a shitload of money off of them. Think of not just all that tax money but the bigtime tobacco lobbyists that hand politicians wads of cash for "favors". The reason why the politicians are doing what they do now isn't because, they themselves don't like the tobacco companies. It's because the non-smoking majority of the population doesn't like smoking and clamors for politicians to do everything they can to stop people from smoking.

So, fuck them, honestly. I agree with the restaurant thing. No smoking in restaurants. But bars? You are in there drinking and killing your liver.
In Public? CARS put out much worse emissions than ANY fucking cigarette. So the non-smoking population who is trying to tell me I CAN'T smoke can kiss my fucking ass. I CHOOSE to smoke much in the same way they CHOOSE to have a stick so far up their ass that they look like a puppet.

[Amelia G]

Please....The population doesn't like cigarettes. The fucking government LOVES them. They make a shitload of money off of them. Think of not just all that tax money but the bigtime tobacco lobbyists that hand politicians wads of cash for "favors". The reason why the politicians are doing what they do now isn't because, they themselves don't like the tobacco companies. It's because the non-smoking majority of the population doesn't like smoking and clamors for politicians to do everything they can to stop people from smoking.

I sort of thought it was an issue of warring factions in government, depending a lot on which ones got the most dough in their districts from which crops. No idea really, though, just an impression.

Fun fact to know and share: Blue Blood's first spokesmodel Sarah McKinley Oakes is descended from President McKinley and owned tobacco farms.

[Morning Glory]

Wasn't McKinley assassinated? It must have been by the Illuminati who want to destroy society by getting everyone addicted to cigarettes and then taking them away.

[Cafe_Post_Mortem]

The government has been spending like lottery winners in Vegas for the past 8 years taking a small buget surplus and turning it into a massive deficit. Add to that the 700 billion dollar give away this year and you have problems.

This president, whether it was Obama or McCain had to raise taxes somewhere. Sin taxes are always the easiest prey. Oh sure, we can tax those filthy smokers, drinkers and fatties. They have a choice. (sic)

I think the cigarette tax is excessive, especially since people will cut consumption. They will turn to hand rolls, or other low tax options which may be a good thing but if you are counting on the money don't count on it too much. Smokers are a clever bunch when motivated. I would have more support for the high sin taxes if they actually went to making sure everyone got health care.

Now cola I believe is a prime area to tax. I love the stuff myself but I have issue with it. Generally cola is cheaper than milk, juice or most other beverages. That encourages people to choose cola over healthier alternatives. Let's be honest, water, while cheap, is boring.

Although I really agree with buster. Slap a tax on everything using HFCS. Maybe we will see a rebound in sugar and corn can go back to making corn products instead of everything. But that one is a pipe dream right now, they are looking for an easy revenue source, not a fix to other problems like health.

[Ajax Knucklebones]

Nobody seems to have mentioned that the purpose of smoking bans is not only to keep second hand smoke out of non-smoker's hair, clothes and lungs but also to make smoking less of option for potential smokers. While this may be a pain in the ass for smokers, it'll reap its rewards in the long run since smoking itself has no actual utility except for being cool, and if you take away the cool factor, there’s not much left to sell, except cancer. People like to drink because its fun, people like to smoke cause…um…

I have no problem with smoking bans in bars. Especially in smaller venues. If you want to smoke just go to the designated open-top area.

Do you smoke?

[Ajax Knucklebones]

So why would you have a problem with a smoking ban then?

I myself do smoke and actually bans don't bother me at all. I'm so used to them. I just think it's funny hearing a non-smoker saying they have no problem with smoking bans. That's like a given. I've never once heard a non-smoker say "THAT'S FUCKING BULLSHIT! ALL THESE SMOKING BANS!".

[nathanmbailey]

Um, I'm not great at picking up context, but I'm pretty sure Ajax was being sarcastic, or some other word that means sarcastic in an ironic/asshole sort of way. His point is why would someone who doesn't smoke have a problem with a ban on smoking? Of course you don't have a problem with it.

Not every city or even county has open top areas for smokers. Some bars don't let you in when you leave without repaying the cover (which is bullshit but happens) and some places are in shitty areas where if you stand outside the bar drunk trying to light a cigarette you get slapped with a PI. Oh, and then there's the whole northern states things where half the year it's too cold to go out and smoke when you're drinking.

Full on public smoking bans is bad for the economy. I know of three bars in the Chicago area that went out of business because smokers were staying home and drinking instead of spending their money at the bar just because they couldn't smoke there. I'm a smoker and I support the bans in restaurants and small bars with poor ventilation, but larger bars and clubs, it's rediculous. And if cigarette taxes keep going up, more and more people are going to switch to chew/dip. Then instead of ugly lungs no one can see and a little bit of smoke, people will be walking around spitting everywhere or in a bottle they're carrying around with disgusting smiles. It's not tobacco that gets taxed, it's cigarettes.

Most southern presidents in the early decades of the US's history owned tobacco and/or cotton plantations. The two things were the biggest cash crops around back then.

As far as HFCS, in moderation it isn't bad for you, no more than normal sugar. I do agree with using real corn and all that, just because it's good for farmers, another group of people the government has gotten very skilled at fucking over.

[Ajax Knucklebones]

Um, I'm not great at picking up context, but I'm pretty sure Ajax was being sarcastic, or some other word that means sarcastic in an ironic/asshole sort of way. His point is why would someone who doesn't smoke have a problem with a ban on smoking? Of course you don't have a problem with it.

Not every city or even county has open top areas for smokers. Some bars don't let you in when you leave without repaying the cover (which is bullshit but happens) and some places are in shitty areas where if you stand outside the bar drunk trying to light a cigarette you get slapped with a PI. Oh, and then there's the whole northern states things where half the year it's too cold to go out and smoke when you're drinking.

Full on public smoking bans is bad for the economy. I know of three bars in the Chicago area that went out of business because smokers were staying home and drinking instead of spending their money at the bar just because they couldn't smoke there. I'm a smoker and I support the bans in restaurants and small bars with poor ventilation, but larger bars and clubs, it's rediculous. And if cigarette taxes keep going up, more and more people are going to switch to chew/dip. Then instead of ugly lungs no one can see and a little bit of smoke, people will be walking around spitting everywhere or in a bottle they're carrying around with disgusting smiles. It's not tobacco that gets taxed, it's cigarettes.

Most southern presidents in the early decades of the US's history owned tobacco and/or cotton plantations. The two things were the biggest cash crops around back then.

As far as HFCS, in moderation it isn't bad for you, no more than normal sugar. I do agree with using real corn and all that, just because it's good for farmers, another group of people the government has gotten very skilled at fucking over.

Hell, Nathan, if I had a dollar for everytime someone called me a "sarcastic, ironic asshole" I'd be a millionaire. What you picked up in my context was correct, btw....

[nathanmbailey]

I was being sarcastic...

[Ajax Knucklebones]

I was being sarcastic...

I'll smoke to that.

[Ajax Knucklebones]

you know what they say guys....sarcasm is the lowest form of wit

Usually, people who aren't witty enough to be sarcastic are the one's that say that.

[nathanmbailey]

I've only been in Ireland three times, and each time it was a layover while the plane taking me to (and one time from) Iraq, so all I've seen is the airport in Shannon. The outdoor heating in the smoking area wasn't bad, but it wouldn't do a thing in a city like Chicago where the wind would overtake the heat right away. It also doesn't seem too practical for a lot of places in large cities that are crammed into a street corner and couldn't build onto the building.

[nathanmbailey]

Sounds good, I could use a smoke right about now. I think I'll wake up my room mate and brave the 30 degree shittiness in shorts and a t-shirt.

Yay for addiction!

[nathanmbailey]

Yeah, it actually only pissed me off. My mom's parents are from Kilkenny (sp?) and my dad was born in Dublin. So the only times I've even remotely been in Ireland I couldn't go anywhere or even have a drink.

[Ajax Knucklebones]

i actually agree with you on that. i love sarcasm. But you still have no point.

O.K. Allah....My point is if you...Meaning you, Allah, are a non-smoker, it's pretty much a given that you'd be all for a smoking ban. So....You don't have to announce it, because we already know.

[athenahollow]

People like to drink because its fun, people like to smoke cause…um…

I smoke because I like to smoke, and because it helps me to relax when in a stressful situation.
Most the people I know drink because they get to act like fucktards and have the excuse of "Oh, but I was drunk, so it's ok"
So, tax both of them, I don't give a shit. I will just start ordering my cigarettes from Russia and give all the taxes here on cigarettes a big "FUCK YOU".

[athenahollow]

so what you're saying is that non-smokers shouldn't even bother to state their case in a debate on smoking-bans? Thats like saying that slaves shouldn't bother to comment on emancipation before reform!

He's saying you are being Mr. Obvious.
It'd be like asking die hard Republicans if they like liberals. Fuck no they don't, they just like having someone to bitch about.

[athenahollow]

and yeh, I think cigarettes are over taxed, but i wasn't talking about taxes, i was talking about the banning/partial banning of smoking in public houses and i'm sorry but "cigarettes just go good with alcohol" isn’t going to win you any court hearings…

Exactly our point:
As Ajax said: "Meaning you, Allah, are a non-smoker, it's pretty much a given that you'd be all for a smoking ban. So....You don't have to announce it, because we already know."