Obama Tax Hike Hits the Poor Hardest
By Mark Impomeni
Apr 2nd 2009 9:55AM
Filed Under:eBarack Obama, Taxes, Obama Administration
An increase in the federal tax on cigarettes went into effect yesterday, raising the levy to $1.01 per pack. The increase was sought by President Obama and Congressional Democrats to help finance an expansion in SCHIP, the federally funded children's health care program. Leaving aside the obvious irony in relying on smokers – on whom the government spends money on programs designed to help them break their habit – to finace a health care program, the tax increase violates an oft-stated pledge made by both Obama and Vice President Joe Biden on the campaign trail.
As candidates, Obama and Biden vowed that their tax plans would not increase taxes on anyone making less than $250,000 per year. Sometimes, that pledge was stated in reference to any kind of tax. Appearing on September 12, 2008, in New Hampshire, Obama said, "Under my plan no family making under $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes." Biden made a similarly unequivocal tax pledge during the vice presidential debate. But the cigarette tax the Obama Administration enacted will disproportionally impact the poor and the middle class, according to a Gallup survey done just last year. That survey found that 34 percent of people making under 12,000 a year were smokers, with smoking incidence rates declining as income level increased.
The White House contends that President Obama was referring only to income and payroll taxes on the campaign trail when he made his "no tax increases for the middle class" pledge. "The president's consistent position throughout the campaign was that he would not raise income or payroll taxes on families making less than $250,000 a year, and that's a promise he has kept," a White House spokesman said. Kathleen Hall Jameson, of the University of Pennsylvania's Annenberg Public Policy Center debunks that claim, noting that the Obama campaign used then Senator Obama's tax pledges to refute Republican charges that he woild raise taxes on energy.
"[The Obama campaign] rebutted both of those with the $250,000 claim. So they did extend the rebuttal beyond income and payroll taxes.
I think a reasonable person would have concluded that Senator Obama was making a 'no new taxes' pledge to every couple or family making less than $250,000."
Supporters of the cigarette tax will argue that increased prices for tobacco products will help discourage smoking. That may be so, but is a wholly different argument. Whatever the Administration's and its supporters' spin, the bottom line is that the president's cigarette tax increase will hit the poor and the middle class hardest, in direct contradiction of the statements candidate Obama made.
Now...how many people in the tobacco industry will be effected in the long run???
By Mark Impomeni
Apr 2nd 2009 9:55AM
Filed Under:eBarack Obama, Taxes, Obama Administration
An increase in the federal tax on cigarettes went into effect yesterday, raising the levy to $1.01 per pack. The increase was sought by President Obama and Congressional Democrats to help finance an expansion in SCHIP, the federally funded children's health care program. Leaving aside the obvious irony in relying on smokers – on whom the government spends money on programs designed to help them break their habit – to finace a health care program, the tax increase violates an oft-stated pledge made by both Obama and Vice President Joe Biden on the campaign trail.
As candidates, Obama and Biden vowed that their tax plans would not increase taxes on anyone making less than $250,000 per year. Sometimes, that pledge was stated in reference to any kind of tax. Appearing on September 12, 2008, in New Hampshire, Obama said, "Under my plan no family making under $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes." Biden made a similarly unequivocal tax pledge during the vice presidential debate. But the cigarette tax the Obama Administration enacted will disproportionally impact the poor and the middle class, according to a Gallup survey done just last year. That survey found that 34 percent of people making under 12,000 a year were smokers, with smoking incidence rates declining as income level increased.
The White House contends that President Obama was referring only to income and payroll taxes on the campaign trail when he made his "no tax increases for the middle class" pledge. "The president's consistent position throughout the campaign was that he would not raise income or payroll taxes on families making less than $250,000 a year, and that's a promise he has kept," a White House spokesman said. Kathleen Hall Jameson, of the University of Pennsylvania's Annenberg Public Policy Center debunks that claim, noting that the Obama campaign used then Senator Obama's tax pledges to refute Republican charges that he woild raise taxes on energy.
"[The Obama campaign] rebutted both of those with the $250,000 claim. So they did extend the rebuttal beyond income and payroll taxes.
I think a reasonable person would have concluded that Senator Obama was making a 'no new taxes' pledge to every couple or family making less than $250,000."
Supporters of the cigarette tax will argue that increased prices for tobacco products will help discourage smoking. That may be so, but is a wholly different argument. Whatever the Administration's and its supporters' spin, the bottom line is that the president's cigarette tax increase will hit the poor and the middle class hardest, in direct contradiction of the statements candidate Obama made.
Now...how many people in the tobacco industry will be effected in the long run???