Tax hikes for the poor: Disguised as health care reform for children by Phil Kerpen
The Bear on Jan 04 2009 at 9:23 am | Filed under: Taxes
President-elect Barack Obama swept large Democratic majorities into both houses of Congress in large part by promising that he would not raise taxes on any Americans making less than $200,000 per year, and would provide most Americans with tax cuts. This stand allowed Democrats to capture the traditionally Republican tax issue. It told voters that, this time, Democratic control wouldn’t mean steeply higher taxes. Yet there are rumblings that one of the first orders of business for the expanded Democratic majorities in Congress will be to raise taxes on millions of Americans nowhere near being rich, including many below the poverty line. It’s a cigarette tax hike, included in a bill to dramatically expand government-run health care. Passing it would signal that Democrats are still the party of higher taxes — and not just for the rich.
The vehicle is a bill to reauthorize the State Children’s Health Insurance (SCHIP) program, and while we don’t know details yet we can assume it will be similar to last year’s version, which increased funding $35 billion and expanded coverage from children in families making less than twice the poverty level up to three or even four times the poverty level. This expansion is financed by raising the federal tax on cigarettes from 39 cents per pack to $1 per pack, a 156 percent increase, and raising taxes on other tobacco products by a similar percentage.
This tax hike would wallop the poor. An analysis by the Tax Foundation found that cigarette taxes hit the poor harder than any other federal tax,…
Read more from Phil Kerpen.com
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