Should Cigarette Tax Pay For SCHIP Expansion?

A recent Wall Street editorial talks about the financing of health care by taxing smokers. The pool of smokers is getting lesser by the day and the propriety of such a tax on this section of the populace is discussed in this editorial. Maryland is one state that proves how erroneous it is to finance health care by taxing smokers.

The editorial goes on to say that last year lawmakers from Maryland increased the state cigarette tax to $2 per pack to fund health care. Today they are realizing the mistake. After this increase in cigarette tax, there has been a 25% decrease in cigarette sales. The reason for the decrease is not a decrease in smoking.

Rather, residents of Maryland are now purchasing cigarettes online or across state lines to avoid the tax. This trend has also been observed in Washington state, New York and New Jersey. A 35 billion dollar SCHIP expansion is on the cards which Democrats plan to finance via a 61 percent increase in the federal cigarette tax – per pack.

The new levy is justified as a sin tax. Unless Americans sin more, both the states and Uncle Sam will go broke…as the editorial says