February 7, 200917 yr FWIW, Cigarette Smoking Among Adults Interesting read (from 2002). According to the results at the bottom, the percentage of person 18 or older that are current smokers is 32.9% among those below the poverty line, while it is only 22.2% for those at or above the line. Coupled with the fact that short-term elasticity of demand for cigarettes is inelastic (aka people can't change their habits easily), the largest portion of this tax will be bore by low-income smokers! Probably not contradictory to what President Obama actually said, but still worth nothing. Yes it's a tax hike, no one said differently. But you're spinning into a tax increase on the middle class. You're correct, WR. It's greater on the Poor than the Middle Class.
February 7, 200917 yr You're correct, WR. It's greater on the Poor than the Middle Class. However, it's only greater on the poor who smoke, not all poor.
February 7, 200917 yr Author However, it's only greater on the poor who smoke, not all poor. Why does that matter? He said he wouldn't raise taxes on the middle class not all of the middle class.
February 7, 200917 yr Yes, however, there is a benefit...if these individuals can't afford to smoke, they will potentially decrease their need for costly healthcare at the cost of the taxpayers, and for some, prevent even costlier cancer treatments. The costs of providing healthcare to those below the poverty line could decrease. Of course, as Swamprat pointed out, the revenues from the tax would decrease as well, but I'd argue that the costs of providing comprehensive and catastrophic health care to smokers is much greater than the revenues raised by increased taxes anyway. But you know what is all too ironic about this whole thing? Smokers, on average cost about $3,000 more in health care costs. So if smoking did significantly decline (which I doubt), then it would save health care companies money. However, if smoking declines, how is the government going to fund this program? I've read that in order to fund it they are going to need a tremendous amount of people to start smoking again. So even if people quit smoking, they will have to come up with new taxes.....
February 7, 200917 yr Why does that matter? He said he wouldn't raise taxes on the middle class not all of the middle class. He's not raising taxes on everyone. He's raising taxes on tobacco products, which are purchased by people of all economic levels. If anyone of any economic level chooses to purchase tobacco products they will pay more. If they don't want to pay more, they don't have to buy the products. Unlike income taxes, one DOES have a complete choice in whether one pays this particular tax.
February 7, 200917 yr But you know what is all too ironic about this whole thing? Smokers, on average cost about $3,000 more in health care costs. So if smoking did significantly decline (which I doubt), then it would save health care companies money. However, if smoking declines, how is the government going to fund this program? I've read that in order to fund it they are going to need a tremendous amount of people to start smoking again. So even if people quit smoking, they will have to come up with new taxes..... The same initiative is being proposed in Kentucky. Do you have a problem if the legislature enacts higher taxes on tobacco products in Kentucky? What about alcohol?
February 7, 200917 yr "I am not a crook" "Read my Lips" "I didn't have sex with that woman" "There are weapons in Iraq". They all lie don't they, so don't act surprised.
February 7, 200917 yr The same initiative is being proposed in Kentucky. Do you have a problem if the legislature enacts higher taxes on tobacco products in Kentucky? What about alcohol? Yes. I believe that the best way to increase tax revenues is not to raise taxes but instead to encourage economic growth. I think that taxes, in general, cause deadweight loss (reducing economic surplus) and therefore hinder economic growth. Of course, I recognize that some taxes have to exist. But taxes on tobacco and alcohol hurt tobacco and alcohol vendors as well as tobacco and alcohol consumers.
February 8, 200917 yr Yes. I believe that the best way to increase tax revenues is not to raise taxes but instead to encourage economic growth. I think that taxes, in general, cause deadweight loss (reducing economic surplus) and therefore hinder economic growth. Of course, I recognize that some taxes have to exist. But taxes on tobacco and alcohol hurt tobacco and alcohol vendors as well as tobacco and alcohol consumers. Can you give me a specific way to encourage economic growth.
February 8, 200917 yr Can you give me a specific way to encourage economic growth. First of all, keep in mind that expansions and recessions happen. So after I give some suggestions, once you tell me that "a recession happened afterwards," nothing can be done to prevent recessions (except incredibly disciplined and prophetic monetary policy, which is probably impossible). When I say economic growth, I am speaking long-term. The best way, IMO, is to cut government spending dramatically. Bush spent more (as a % of GDP) then any President since FDR (and less than 50% of the increases were for National Defense & homeland security). President Obama's plans look to be to try failed Keynesian policies that include drastically increasing government spending. So, cutting government discretionary spending will encourage long-term economic growth. Tax cuts should probably be involved as well. If you want me to get into what needs to be cut out, we can do that as well. Probably better for another thread though.
February 8, 200917 yr "I am not a crook" "Read my Lips" "I didn't have sex with that woman" "There are weapons in Iraq". They all lie don't they, so don't act surprised. Don't forget, "There will be no lobbyists in my administration" and "change". :walk:
February 8, 200917 yr Author He's not raising taxes on everyone. He's raising taxes on tobacco products, which are purchased by people of all economic levels. If anyone of any economic level chooses to purchase tobacco products they will pay more. If they don't want to pay more, they don't have to buy the products. Unlike income taxes, one DOES have a complete choice in whether one pays this particular tax. I never said that he is raising taxes on everyone or that just the middle class will pay more. Simply he is raising taxes on some in the middle class. Obamaites will never see this.
February 8, 200917 yr I never said that he is raising taxes on everyone or that just the middle class will pay more. Simply he is raising taxes on some in the middle class. Obamaites will never see this. I'm not sure what "Obmaites" are supposed to see. This is not an increased tax on the middle class. It's a tax on a specific demographic, which, apparently a surprise to some, is not defined by their economic status. This hyperbole that is being spun is simply an attempt to paint Obama as a person who is breaking his promises. One doesn't have to be an "anti-Obmaite" to see that this simply isn't true. One just has to be willing to look at the tax objectively, and not trying to exaggerate it's intent.
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