July, 17th 2007

Bad behavior taxes set to go up: $10 tax on a cigar!

– Liz Mair

Yep, you read that right. Federal taxes on cigars are set to go up from 5 cents per cigar to $10 per cigar. $10, people. That's a tax increase of 20,000 percent!

But it's not just taxes on cigars that are going up. Federal tax on a pack of cigarettes is set to rise from 39 cents a pack to $1 a pack-- another hefty increase.

You'll be surprised to know that this is part of a Democratic plan to better fund a health program-- SCHIP, which basically covers medical care for poor kids. It's a worthy objective, but big tax increases, even "sin taxes," where one might argue that the consumer consents to the outrageous level of taxation by purchasing the relevant product, are not the way to go in achieving said goal.

Of course, we can all look on the bright side-- the Democratic contingent in the House apparently wanted taxes on cigars pegged at 53% of their sales value. A $10 maximum tax on each cigar seems like small beans compared to what that 53% could have amounted to.

Not that any of this is in any way acceptable or anything...


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