Taxing Tobacco
Jun 10th, 2009 | By Linda Brady Traynham | Category: Featured, Investing Strategies, Personal Liberties
The great financial minds in Washington are at it again, starting another war. As usual, it is “for our own good” and will make twenty-eight per cent. of the adult population miserable while destroying a large industry and reducing tax revenues sharply. Does legislation get any better than that?
This time they’re making war on another weed, one that has been a favorite in America since before the time of Pocahontas. The Nicotine Nazis are on the rampage and propose to turn tobacco over to the FDA to “regulate.” The FDA intends to start by mandating the removal of all additives, including menthol, and my girlish laughter is going to dissipate as the smoke does.
Since the sound byte medical types and MSM are convinced that smoking is worse than sex was to Victorians most citizens will doubtless think prohibiting tobacco (the real proposal; regulation by the FDA is merely the first step) is a fine solution that will lower health-care-related costs even though the jihad of the last thirty years has had no effect. The usual Liberal logic was applied: you may not smoke, but all diseases are tobacco-caused so either you are ill because of “second hand smoke” or you took a puff behind the woodshed when you were thirteen and forty years later you got cancer because of it. Smoking has become the easy, automatic answer for cause of death and is probably implicated in cases of suicide and car crashes.
This isn’t about making Linda snarl at the world; we’re interested in the economic effects–which will be catastrophic. Ten years ago I spent $72/month on my two-pack-a-day habit. Taxes have been piled on to the point that the carton of cigarettes that cost nine dollars then is well over fifty now. Think of that as fifty buck lattes or fifty buck movie tickets.
“Sin” taxes are a favorite for revenue and those of us who enjoy a little tot of Irish or a glass or two of (heart healthy) red wine are subject to truly sinful and prejudicial new taxes–at least one raised recently by 537% by Mr. “I’m not going to raise your taxes unless you make a quarter of a million a year.” We got the usual equal treatment before the law: all smokers and drinkers are penalized.
Has anyone consulted the Carolinas to see what effect knocking R J Reynolds off the Big Board is going to have?
What about the shareholders there and of P. Lorillard and others? What about my solicitous neighbors who voted a ten dollar a carton tax last year to procure more “social services” before Mr. Obama added his ten dollar a carton tax to already outrageously punitive fees? The loss in tax revenue will be enormous and governments don’t understand about reducing spending when income falls. Adjusted for inflation something like eighty per cent. of our cherished smokes are pure tax revenue, and guess what? Non-smokers are going to have to “sacrifice” to make up for that loss.
A black market will surely spring up, which may account for the BATF ruling that all purchases of fifty cartons or more must be reported to them! Even if all taxes are paid. Seriously. You have to fill out a form including your license plate number and full personal data.
Travel and tourism…a higher percentage of Europeans and those from the Middle East smoke and I know what my rule is: if I can’t smoke, I don’t go. How appreciative are New York, Las Vegas, and Miami going to be when the French and Germans say “non” and “nein?” Who cares how good the exchange rate is if a monsieur can’t even buy a pack of Galoises or an American brand or smoke within twenty-five feet of a doorway? Will there be revenuers, so to speak, wandering around the country hunting tobacco patches and sniffing the air? Why not? There are some of those jobs Mr. Obama claims he is going to create. Will foreigners get special dispensations or will customs confiscate their cigarettes for failing to meet US standards?
Attempts to legislate morality and lifestyles always fail and always have nasty consequences. If there hadn’t been prohibition Joe Kennedy would never have made a fortune running rum and we would have been spared Teddy in the Senate all these years. Why not ban sugar, which is far worse for you than fat, and ban the substitutes too? (Because the Stevia producers do not have the lobbies that sugar, Equal, and Splenda do.) Put enough social engineers to work and we could wind up with everyone in the country loathing everyone else and set new records for assault and battery.
Most of you probably don’t smoke and don’t see what the fuss is about; you even believe my health will improve if I am treated like a toddler. (Will I live longer if I stop smoking? No, but it will seem that way. Mostly, it is my choice, not the government’s.) My bleeding ox may not move you, but how do you feel about the proposal you be taxed for every mile you drive? I don’t drive a hundred miles a month, while lots of you drive several thousand. Will you like having your car fitted with a device that records your mileage (at your own expense) and allows the government to track your every move? They don’t intend to lower the incredible taxes on gasoline, either. It will be argued that you deserve it because you are using more than your fair share of the gasoline and doing more than your fair share of wearing out the roads.
You know how it goes, people: when you don’t protest when it happens to us, they’ll come after your butter, cheese, salt, red meat, Cokes, cell ‘phones, and roofs that are any color other than white. In times past coffee, tea, and chocolate have all been taxed and chances are that most of you regard one of the three as an invigorating “must have.” They look like prime targets for revenue-hungry governments once the evil weed is outlawed.
Laissez faire, people, laissez faire. Let’s all take responsibility for our own choices and pay for our own vices and stop regulating and taxing others for theirs.
Let us hope that wiser–or more rapacious–heads prevail in the latest campaign of the war against tobacco.
Your Fuming,
Linda Brady Traynham
June 10, 2009
P.S.: Now to business. You could call your broker this morning and sell tobacco short before it occurs to a lot of people that the proposed policy would destroy another large industry and a major source of income. Even though I expect a fall in tobacco stocks I’m more inclined to think we should hold off until we see what sort of support Dr./Senator C can garner. There could be some good short-hold bargains to be picked up but your timing will need to be impeccable–and keep a firm eye on your “greed” gene. Maybe scoop up a handful when the gloom is deepest but promise yourself faithfully that you’ll dump it when you have a modest profit.
I’d have to look at current prices and what tobacco stocks have done for at least the last year, but I’d be feeling pretty antsy when I had a twenty-five per cent. profit, and I’d begin charting volumn and price daily when I was ten per cent. up. By the time a stock had recovered half it had lost it would take a squad of Marines to keep me from selling. Nuthin’ wrong with a quick little ten to fifteen per cent., you know, and a lot right about it.
As volatile as the market has been you can lose, get lucky, or make your decisions ahead of time. I have never lost serious money by selling too soon; I’ve lost it by not having faith in my judgement and buying or by not paying attention and missing a major sell signal.
How about a quick identity check? I’m a trader, the spiritual descendent of robber barons, and believe in hoisting the Jolly Roger, a quick capture, putting a prize crew on board, and on to the next opportunity. How many of you think in terms of “investing” “for the long term?” My bet is that most of you are traders who believe in stashing spare cash in metal or you wouldn’t be here.
Dear Gary and Linda:
By Gods, you really know how to start a revolution…
Didn’t we go through this thing a bit over 230 years ago with a shipload of tea? Must we do it again for tobacco, coffee, red meat, butter, chocolate? For the Gods’ sake, must we turn the Weapons of Mass Destruction (provided by Iraq, Inc., of course) on our own Duly Elected Government?
I believe that it’s our God-Given Right to choose our own type of death, be it by tobacco, alcohol, sugar, fornication, or Oreo cookie. Anybody wants to regulate my right to smoke can whip their .44 Magnum in my face. Oops! I forgot. Those pansy-waisted creampuffs don’t believe in the Second Amendment, are unarmed, believe in euthanasia, and enjoy the benefits of the Hive-mentality. It would be cruel to stomp on that nest of cockroaches, wouldn’t it?
Well, all I know is the following: If the Mogambo Guru runs for President, I’M VOTING FOR HIM. And Linda? You need a carton of bootleg smokes, let me know. I’ll get them to you and Gods Bless!
Much Love,
Frankie Diaz
P.S. Should you wish to publish, you may use the full name. Let the boogers come after me!
But, if the government, through programs like Medicare and Medicaid, has to pony up a larger-than-normal amount for smokers’ health care, isn’t is reasonable that the smokers should pay more than their share in taxes to make up for it?
You must be new here.
We don’t like redistribution and government meddling. We don’t think the government should be taking money from anyone to pay for anything for someone else.
The very notion of having to curtail my personal activities because the rest of you yahoos feel I owe you something…does no one feel outrage on a deep level over these things?
Keep your healthcare money. I don’t smoke, but I do other things that will surely cause my body to wear out a little faster. I’ll pay any necessary medical bills myself or handle my own injuries and health issues with my own research and my own money.
Tipping a glass your way, Frankie.
See you in the reeducation camp!
I’m not in favor of taking money from anyone to pay for anyone else. What I’m saying is that, statistically, YOUR health care costs will very likely be higher because YOU smoke, and the extra money YOU are paying in now through taxes will be returned to YOU to pay for YOUR smoking-related health issues.
Now, if you want to tax people that DON’T smoke to pay for extra health care for people that DO, THAT I have a problem with.
Frankie Diaz wrote:
“Dear Gary and Linda:
By Gods, you really know how to start a revolution…
Didn’t we go through this thing a bit over 230 years ago with a shipload of tea? Must we do it again for tobacco, coffee, red meat, butter, chocolate? For the Gods’ sake, must we turn the Weapons of Mass Destruction (provided by Iraq, Inc., of course) on our own Duly Elected Government?
I believe that it’s our God-Given Right to choose our own type of death, be it by tobacco, alcohol, sugar, fornication, or Oreo cookie. Anybody wants to regulate my right to smoke can whip their .44 Magnum in my face. Oops! I forgot. Those pansy-waisted creampuffs don’t believe in the Second Amendment, are unarmed, believe in euthanasia, and enjoy the benefits of the Hive-mentality. It would be cruel to stomp on that nest of cockroaches, wouldn’t it?
Well, all I know is the following: If the Mogambo Guru runs for President, I’M VOTING FOR HIM. And Linda? You need a carton of bootleg smokes, let me know. I’ll get them to you and Gods Bless!
Much Love,
Frankie Diaz
P.S. Should you wish to publish, you may use the full name. Let the boogers come after me!”
Dear Frankie:
The main reason this isn’t going to start “I think I’m in love!” is that you deserve better than to be fourth in line. I have a strict seniority system (which is really very comforting to those I love because it means no one can ever take your place. I love new people TOO, not “better.” You might have to wait your turn to get my attention but…how did I get over here?!)
What a terrific letter, thank you!
I’ll vote for my adored Mogambo any time and I could think wistfully about puttin’ on our cockroach-stompin’ boots. We’ve got th’ big four-engine jobs that live in a big pine tree and from time to time one wanders in.
It’s one thing to hit us with their dumb political “correctness” stuff, but when they start messin’ with our smokes and our hooch enough is more than enough. Instead of throwing the tobacco in the harbor maybe some blithe spirits will toss liberals in the Chesapeake where the cold water will awaken them to some semblance of reality. Oh, Lawks, I probably just threatened Congress and will end up in jail. Have the revived the Alien and Sedition act yet?
Gary, if Frankie wants my e-mail address please give it to him. I would really like to see more of what he writes.
Frankie, again my thanks, and if you come by a dry van box load of Salem Light 100s (which I have given up for a vile substitute because of price) you’ll have more than the price of admission for sanctuary at Mildew Manor if we have to circle the wagons! We’ve got th’ cows and the grand old cars, you bring th’ smokes, and we’ll find someone who can make a reasonable facsimile of Tullamore Dew and have our own superannuated Beatnik colony while the rest of the world goes mad.
You made my day. Hugs, Linda
Brian, you are quite right, I am sure the government is going to apply that extra tobacco tax they are collecting towards Medicare and Medicaid. We have heard this BS line of reasoning over and over and it can be applied to many activities and goods and increasingly is. The fact is that government at every level has figured out that smokers are a minority population and therefore can be extorted over and over again for more cash with no backlash from the majority of voters. I have smoked a pack a day for 38 years, ski’ed, windsurfed, hiked, biked the entire time. I drink voluminous amounts of Maker’s Mark. I’m 54 with low blood pressure and ideal weight. I’m surrounded everyday by obese types that are in poor health due to their passivity and lack of drive towards any kind of passionate activity. No they don’t smoke, they just eat junk food and watch TV all day. I disapprove of their lifestyle but I am not advocating confiscating their wealth.
The dangers of smoking are real but greatly exaggerated like so many other issues today. There are many factors affecting one’s health, genetics probably being the most determinate. Any reasonable individual can make a decision to smoke or quit based on how it is affecting them.
Brian wrote: “But, if the government, through programs like Medicare and Medicaid, has to pony up a larger-than-normal amount for smokers’ health care, isn’t is reasonable that the smokers should pay more than their share in taxes to make up for it?”
Purrrrr.
Dear Brian: Thank you VERY much for putting the purported case so succinctly and politely.
1. The government has no business paying anyone’s medical expenses.
2. No matter what C. Everett Koops said and the ranting hysteria of the MSM and the AMA, smoking really is not the cause of all disease and a certain death. Mostly it smells bad.
3. Not only do I not want Medicare (the price of refusing it is forfeiting my entire SS check), but my ONLY medical problem is a low thyroid, and not even the Nicotine Nazis claim that smoking is the cause.
4. I have smoked since I started college in 1959. My children are in superb health despite having been reared in a smoking environment. The wonderful man in my life has a similar history.
5. The taxes are not spent to care for emphysema victims; they are put into the general fund and squandered on the usually bizarre programs big government runs.
The real issue is that most of what the government does is not in our best interests and not within Constitutional bounds. When my husband died I was offered the splendid opportunity to replace the health care plan he had (well, with a far worse one, actually) for almost $850/month! Since Andrew was 19 and in superb health and I only go to the doctor once a year usually for a check up and to get my Rx for Armour Thyroid reissued I could see no reason to spend over ten thousand dollars a year on bad insurance. I chose no coverage. True, eventually Andrew broke his hand skateboarding and it cost $12,500, but I was still fifty per cent. up by having had no coverage.
I suppose one of these years I ought to buy a catastrophic care policy, but since Medicare and Tri-Care (which I certainly earned) do not cover either dental or glasses, I am certainly not impoverishing anyone with my presumably reckless life style.
The issue for me isn’t just taxes; primarily it is intrusion into my life. I am not a child and I do not wish to be a chattel of the government.
The issue here for most is the shortsightedness of regulating another industry out of business. The economic effects will be severe.
Again, thank you for your calm comment and for asking a question many are concerned over. I think we would have much better society if we returned to the old ways and solved our own problems and paid our own expenses instead of thinking that government handouts are “free” money. Filtering funds through bureaucracy and regulation is very costly. Far more money goes to Washington than comes back to Texas, for just one example. There are 49 others, and no state ever got back more than the citizens spent. Worse, the money collected is not spent on things taxpayers would choose ourselves.
One last comment: smoking has therapeutic benefits! Here is a very simple one: tobacco smoke destroys mold and mildew which are perhaps the most virulent allergins known. I can’t walk into our local Best Buy without beginning to cough and choke immediately.
After our smoke has kept down those hazards to our health here we filter it through a series of Ionic Breezes to restore air quality. Our homes are aired daily, so we aren’t ever going to have to deal with “sick building” syndrome. More important than who is right and who is wrong the main issue is our right to the “pursuit of happiness” without let or hindrance by the government.
I am very glad that you are not, presumably, a smoker, because increasingly smoking hinders our ability to go about our daily lives peacefully. You would not like being denied the right to use public transportation or the ability to enjoy a simple restaurant meal.
Other than the issues of taxation without representation and the Nanny State, the issue of what government may choose to attack or tax next has relevence for most of us. They can tax coffee to the moon for all I care because I can’t abide the stuff, but a lot of you would be very upset by fifty dollar a pound coffee.
Cordially,
LBT
Linda Brady Traynham
Brian’s back: “I’m not in favor of taking money from anyone to pay for anyone else. What I’m saying is that, statistically, YOUR health care costs will very likely be higher because YOU smoke, and the extra money YOU are paying in now through taxes will be returned to YOU to pay for YOUR smoking-related health issues.
Now, if you want to tax people that DON’T smoke to pay for extra health care for people that DO, THAT I have a problem with.”
Brian, dear, we don’t want to tax anyone for his or her lifestyle. We certainly do not want to tax anyone to pay for the health care of others or even for ourselves. We’re adults and like being responsible for our own behavior. We want the rest to do likewise.
Have you ever heard of “lies, damned lies, and statistics?” Logic is a useful practice, too. The syllogism is flawed, and the easy, “obvious” conclusion that smoking kills millions of people a year (dead people don’t have health expenses) simply cannot be substantiated. That still isn’t the issue. The REAL issue is that the government is not supposed to be in the health insurance business. Another is that slaves are told what to do and furnished such medical care as ol’ massa chooses to provide.
Given my choice I would go back to the original Constitution and start over with the most rigid interpretation. I’m willing to hand over my legislated “right” to vote any time we go back to a system where only property owners (I am one, of course) can vote and the only taxes are tariffs and import duties.
Thanks again for writing.
LBT
[...] think Linda got most of it right the other day. This bill is definitely a test of strength for the government. And I even think the term [...]
The tobacco industry is no doubt heavily invested in the drug companies, who will prosper with the disappearance of a substance that helps control many mental disorders….gee, Dr. Koop didn’t mention that fact, did he? The drug makers won’t be happy until they have everybody and their dog on Prozac. By the way, nicotine prevents Alzheimer’s and Parkinson’s disease. Dr. William Cambell Douglas II, MD has a great book out right now telling the real health truth about tobacco….read it.
Smoking – the big boogy…let’s talk health. Life style is the pursuit of happiness so grandly stated in the Declaration of Independence. Anyone besides me notice the “sacred cow” homosexuality getting a pass as to health costs? How much has been spent worldwide on AIDS? It is extremely hypocitical to not be concerned over health costs here but to be rabid over smoking, drinking, McDonalds and the like and not to hear this mentioned. Oh, we could also talk about the different likes of heterosexuals and how some of that activity affects ones health…or could.
It is past time to get real here and say it like it is. There is no way that one group should pay more taxes than another by whatever route. Our Constitution clearly states this. The Conservative talking heads need to stand up and grow some. It is appalling to watch and listen as main issues are evaded or skirted around.
We are a free people but not for long if we do not vote in people who will take a stand and who truly will uphold our Constitution. Everyone from the Supremes on down in government need to be ousted and we must start over. This is a nest with too many tentacles and too few testicles. By the way, there are cigarettes that have no additives and they are difficult to come by. This is a good time for companies to start pushing these. When I say difficult, I mean one (in my experience) can only come by them at tobacco stores.
keepthefaith
Thanks for posting, Faith.
The slide toward tyranny continues…it is now (as of June 26th 2009) a Class C felony in the State of Washington to have pipe tobacco shipped to you that has been purchased through the internet, phone or mail order. Pipe tobacco! What next? Frisking you at the state border for tobacco purchased in another state?