Well, here is a novel idea from Bruce Bartlett. He thinks we should tax such things as tobacco and alcohol, the so-called sin tax scheme.
One quick note: sin is in the eye of the beholder. My sin may not be your sin, if you get the drift.
Bartlett’s bona fides are legit. He is a columnist for The Fiscal Times, an online newspaper covering the economy, business and personal finance; and for Tax Notes, a weekly magazine for tax policymakers and practitioners. He was previously a columnist forForbes Magazine and Creators Syndicate.
But, I gotta laugh. Bartlett’s conclusion is that those who are sinning must pay for their sins. Plumb biblical, if you ask me. Then, again, he didn’t ask me.
However, in today’s world of constant news hours, my opinion is almost as good as his. Theoretically, that is.
Anyway, tobacco smokers are already paying for their sins, while local, state and federal governments want to continue that trend upwards.
Here is what Bartlett concluded in a recent edition of his Capital gains and Games blog:
Perhaps the lesson to be drawn from the historical experience is that prohibiting nonviolent activities and substances that people are going to insist on doing or using anyway will never stamp them out. But if they are legalized, controlled, and taxed, society may be able to keep them within acceptable bounds while raising significant government revenue exclusively on the backs of those who insist on engaging in the behavior. That’s about as close to a win-win situation as one is going to find in the public policy arena.
The fact is, taxes on tobacco have increased from $3,631,728 in 1997 to $15,834,746 in 2007, the latest figures from the Tax Policy Center, which is a joint venture of the Urban Institute andBrookings Institution. The Center is made up of nationally recognized experts in tax, budget, and social policy who have served at the highest levels of government.
In other words, those who smoke are paying through the nose for their “sin” already. And yet, Congress wants more, which is odd when you think about it. The feds say that smoking is harmful to your health, but is quite willing to take your tax money while trying to prevent you from smoking.
Yeah, that makes sense.
The federal government is balancing budgets and funding many programs through a program it wants to kill off. Huh?
And, now for a real eye-opener. So you like to have a little toddy after your evening meal. You buy a nice bottle of, say, single malt Scotch (my favorite beverage anytime of the day, actually). You pay taxes on that fine bottle, right?
National Alcohol taxes in 1997, according to that same Tax Policy Center, amounted to $2,263,512 and $5,626,187 in 2007.
You getting the picture, yet?
Mind you, these tobacco tax increases are coming at a time of a down economy and at a historic period when the ratio of debt to family income is almost 15 percent.
We are not through just yet with the tax talk.
Get this, the TPC, estimates that 45 percent of households will owe no federal income tax in 2010 and that more than 90 percent of them will get government payments through refundable tax credits. Most nonpayers have relatively low income: Six in 10 make less than $20,000.
More than two-thirds of people who pay no income tax do pay Medicare and Social Security payroll taxes and about half owe payroll taxes that exceed their refundable tax credits. Counting income plus payroll tax liabilities, less than a quarter owe no tax.
I know. Your eyes are crossing just about now.
Here is the skinny: tobacco users are being outrageously punished and paying more than their fair share of excise taxes already as seen above. Many of them fit into the category of making so little money, they pay no income tax to the federal government.
It does not take a financial wizard to see that these “social engineered” taxes are hitting those who are small in the wallet.
What we need is a good Tobacco Party in the political arena. If the Tea Party folks can make a difference, why not a Tobacco Party?
Won’t happen, I know. But, it is a nice thought.
Selah
