Democrats are working on a huge expansion of the State Children’s Health Insurance Program that covers children of families with too much income to qualify for Medicaid. The only problem is they will need a lot of people to START smoking soon in order to meet its funding goals, editorializes The Examiner:
There are some differences in detail between the Senate and House bills authorizing massive expansion of the State Children’s Health Insurance Program (SCHIP), yet the competing plans have this much in common: Some states will be winners, others will be losers, but they’re all going to have to recruit millions of new smokers. This is because both plans depend on an increase in the federal tax on cigarettes, with the House version upping the levy 45 cents and the Senate 61 cents. Unfortunately, economic reality makes clear just how imprudent it is to take such a course.
There are two ways in which this is true. First, raising the federal tax on smokes will decrease sales. Even congressmen know that a higher price for a commodity reduces the number of consumers able to purchase it. The hitch here for SCHIP and the states is that the latter also tax cigarettes, which means they will lose revenue as a result of the federal increase.
A study by the conservative Heritage Foundation found that every state would lose at least $1 million in annual revenues under the House bill, with 17 losing more than $10 million. Under the Senate bill, every state would lose at least $1.4 million, and half would lose more than $10 million. Losses for three states — California, Ohio and Pennsylvania — would exceed $50 million.
Read it all at the above link. The money either must come from tobacco taxes or some other tax increase, according to the Democrats’ own “pay-go” rules.
Smoke ’em if ya got ’em! What? You want to live forever or something? Remember – it’s for the children . . .