Although he promised to raise taxes only on “the wealthy,” President Obama’s first major legislation was a major regressive tax hike disproportionately paid by the poor – a dollar tax on a pack of cigarettes. Many in the Louisiana legislature seem determined to follow in his footsteps. The Ways and Means Committee in the State House on Monday narrowly voted to raise taxes on a pack of cigarettes by 50 cents this week, on top of the recent federal increase of $1. The bill also raised taxes on loose tobacco. Since poor people spend a higher proportion of their income on cigartettes, the bill will hit them he hardest.
Proponents of the bill claim the tax will raise an additional $92 million for health programs, with half going to Medicaid hospital reimbursements and half to social-engineering smoking-cessation programs. But such Medicaid funds are extremely fungible; and despite legislative language attempting to segregate the money, there is no real way to guarantee the “additional” Medicaid funds will not just be given to hospitals in lieu of general funding.
Smokers make easy scapegoats, but many studies show that their shorter lifespans means they use less public funds for healthcare than nonsmokers. But in the quest for more tax money, federal and state lawmakers find such studies easy to ignore. Louisiana, which often prides itself on its differences from the rest of the country, does not need to follow this latest national fad of 21st-century Puritanism and social engineering. And taxpayers don’t need the additional burden during these tough economic times. Anti-tax lawmakers in the full House still have a chance to vote down the bill, and Gov. Jindal can keep his no-new-taxes promise by vetoing it. It is votes like this — proposals to tax easy scapegoats — where politicians’ anti-tax promises are truly tested.