Reason.com - Free Minds and Free Markets
Reason logo Reason logo
  • Latest
  • Magazine
    • Current Issue
    • Archives
    • Subscribe
    • Crossword
  • Video
  • Podcasts
    • All Shows
    • The Reason Roundtable
    • The Reason Interview With Nick Gillespie
    • The Soho Forum Debates
    • Just Asking Questions
    • The Best of Reason Magazine
    • Why We Can't Have Nice Things
  • Volokh
  • Newsletters
  • Donate
    • Donate Online
    • Donate Crypto
    • Ways To Give To Reason Foundation
    • Torchbearer Society
    • Planned Giving
  • Subscribe
    • Reason Plus Subscription
    • Print Subscription
    • Gift Subscriptions
    • Subscriber Support

Login Form

Create new account
Forgot password

Politics

Obama's First Tax Increase

Jacob Sullum | 1.12.2009 4:03 PM

Share on FacebookShare on XShare on RedditShare by emailPrint friendly versionCopy page URL
Media Contact & Reprint Requests

This week Congress plans to vote on a bill that would dramatically raise the federal cigarette tax and use the money to fund an expansion of the State Children's Health Insurance Program (SCHIP).  Congress approved similar bills in 2007 and 2008, but they were vetoed by President Bush in one of the few decisions he made during eight years in office that were both courageous and consistent with limited-government principles. (His attempts at Social Security and immigration reform are the two others that spring to mind; perhaps you can think of more.) Barack Obama, who will be president next week, is expected to sign the SCHIP bill, despite his avowed reluctance to raise taxes in the middle of a recession. SCHIP costs have risen and cigarette smoking has declined since the last two times around, so either the expansion will be more modest, the tax increase will be steeper, or more money will have to be found elsewhere (such as in our children's future earnings, if Congress decides that the uncovered SCHIP costs will barely be noticed in a budget deficit that has already exceeded $1 trillion and may be closer to $2 trillion after the stimulus package Obama is pushing).

In a June 2007 column I explained why the SCHIP expansion is inefficient, in many cases funding medical coverage for children who already have it, and unfair, relying on a discriminatory and highly regressive tax that is not justified by the cost smoking supposedly imposes on taxpayers. (Smoking actually seems to reduce government spending, even if the analysis is confined to health care programs.) Later that year Ron Bailey warned that expanding SCHIP is a step toward (even more) socialized medicine, and I argued that the federal government should leave decisions about subsidizing children's medical care to the states.

Start your day with Reason. Get a daily brief of the most important stories and trends every weekday morning when you subscribe to Reason Roundup.

This field is for validation purposes and should be left unchanged.

NEXT: Your Friendly Paramilitary Police Raid Post

Jacob Sullum is a senior editor at Reason. He is the author, most recently, of Beyond Control: Drug Prohibition, Gun Regulation, and the Search for Sensible Alternatives (Prometheus Books).

PoliticsObamacareBarack ObamaTobaccoTaxesNanny StateEconomicsPolicy
Share on FacebookShare on XShare on RedditShare by emailPrint friendly versionCopy page URL
Media Contact & Reprint Requests

Show Comments (52)

Latest

The Gun-Free School Zones Act Is Doubly Dubious

Jacob Sullum | 9.3.2025 12:01 AM

The White House Says Trump's Tariffs Have Raised $8 Trillion in Revenue. That's Not Even Close.

Jack Nicastro | 9.2.2025 5:20 PM

An Alaska Man's $95,000 Plane Was Seized Over a 6-Pack of Beer. Now He's Taking His Case to the Supreme Court.

C.J. Ciaramella | 9.2.2025 4:44 PM

GAO Report Finds 'Shrinkflation' Was Fake News

Eric Boehm | 9.2.2025 3:40 PM

The Rationale for the Federal Circuit's 'Radical Left' Tariff Decision Is Fundamentally Conservative

Jacob Sullum | 9.2.2025 1:55 PM

Recommended

  • About
  • Browse Topics
  • Events
  • Staff
  • Jobs
  • Donate
  • Advertise
  • Subscribe
  • Contact
  • Media
  • Shop
  • Amazon
Reason Facebook@reason on XReason InstagramReason TikTokReason YoutubeApple PodcastsReason on FlipboardReason RSS

© 2025 Reason Foundation | Accessibility | Privacy Policy | Terms Of Use

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Take Reason's short survey for a chance to win $300
Take Reason's short survey for a chance to win $300
Take Reason's short survey for a chance to win $300