Obama’s First Tax Increase

Today President Obama signed into law the first tax increase of his administration. From Amanda Carpenter at Townhall:

President Obama approved his first tax hike today.

The bill he signed to expand the State Children’s Health Insurance Program contains a provision to increase taxes on tobacco by a whopping 155 percent. That means the federal taxes on cigarettes have gone up an additional 61 cents a pack. This brings federal taxes on a pack of cigarettes to $1 per pack total.

(It also means the nation will need to maintain a steady level of smokers to subsidize kids health care, an unlikely outcome in light of a fledgling economy and increased taxes on the tobacco.)

Despite his pledges not to tax low-income Americans, Obama’s tax increase on tobacco will disproportionately punish the poor, who are more likely to become addicted to cigarettes.

55 percent of smokers are considered “working poor” and one in four live below the poverty line.

This will be the first of many new taxes or tax increases. Many of those will adversely impact the poor. Raising taxes, we all know, has a depressive affect on tax revenue, so the funding of the SCHIP program will have a funding source that should diminish over time. New sources of funding will have to be found for this new bureaucracy for this new law that will not achieve what it is intended to achieve.