Skip to content

Legislators Pit “Big Tobacco” Against Children

2 min readBy: Gerald Prante

Using rhetoric that is almost laughable, in the battle over S-CHIP, some on the Senate Finance Committee have decided to pull out the big-tobacco-versus-children argument. From the Washington Post:

As a Senate committee prepared to approve an additional $35 billion for children’s health insurance, the Bush administration spelled out its objections to how the increase would be paid for-a 61-cent increase on the excise taxAn excise tax is a tax imposed on a specific good or activity. Excise taxes are commonly levied on cigarettes, alcoholic beverages, soda, gasoline, insurance premiums, amusement activities, and betting, and typically make up a relatively small and volatile portion of state and local and, to a lesser extent, federal tax collections. for a pack of cigarettes.

“Ironically, the proposed legislation would increase taxes on low-income taxpayers as a way to fund health coverage for low-income individuals,” Health and Human Services Secretary Mike Leavitt said Tuesday in a letter to Sens. Max Baucus, D-Mont., and Charles Grassley, R-Iowa.

Baucus replied with his own letter to Leavitt. “When given the choice between standing with big tobacco companies and standing with kids, I stand with America’s children,” said the chairman of the Senate Finance Committee.

Legislators must realize that “big tobacco” will not bear 100 percent of the cigarette taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. burden. In fact, in its distribution tables, the Congressional Budget Office even assumes that 100 percent of the tax is borne by cigarette consumers, meaning “big tobacco” would not be hurt. Either way, a large fraction of the tax is passed on to smokers, meaning Senator Baucus’ line should really read: “I stand with children vs. cigarette smokers, who are disproportionately low-income.”

Here are some other alternatives for supporters of the current S-CHIP bill and the rest of the gang on Capitol Hill that will likely continue using this type of misleading political rhetoric to advance the paternalistic agenda of some special interest groups through a very narrow tax to fund spending programs that have broad public benefits:

Why not raise individual income taxes to pay for S-CHIP? We could repeal the mortgage interest deductionThe mortgage interest deduction is an itemized deduction for interest paid on home mortgages. It reduces households’ taxable incomes and, consequently, their total taxes paid. The Tax Cuts and Jobs Act (TCJA) reduced the amount of principal and limited the types of loans that qualify for the deduction. to pay for S-CHIP expansion (and healthcare for nearly everyone). But I guess many in Congress side with “Big Real Estate over Children.”

Or how about raising the airport transit fee? Or should we side with “Big Airlines over Children?”

What about raising the corporate income taxA corporate income tax (CIT) is levied by federal and state governments on business profits. Many companies are not subject to the CIT because they are taxed as pass-through businesses, with income reportable under the individual income tax. to finance S-CHIP? Or would politicians rather stand with “Big Business over Children?”

Why haven’t legislators proposed raising the alcohol tax to finance S-CHIP? Do they support “Big Alcohol over Children?”

Why not repeal farm subsidies that tend to disproportionately benefit wealthier farmers and agriculture businesses to fund S-CHIP? Or would they rather support “Big Ag over Children?” (Oddly enough, many of these same members of Congress had previously voted for ag subsidies that went directly to tobacco growers.)

Finally, while we’re at it, we could even take the advice of some state legislators and impose a special excise tax on pornography–or do supporters of the current S-CHIP legislation stand with “Big Porn over Children?”