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Monday, April 21, 2008

States Look to Tobacco Tax for Budget Holes

This article from the New York Times talks about the new tax proposed on cigarettes. While the Massachusetts tax is focused on shoring up the health care program, other states are taxing tobacco for other budget shortfalls. The problem is that they would prefer people stop smoking because they ban smoking everywhere except inside your home. This tax should help people who want to quit. But it won't bring in the revenue that the states want or need. The problem is that government is spending too much. I guess nobody should be angry over a tax on such a demonized legal product. But when are people going to get angry that the government is simply spending more money than it has? Why can't government see that they are placing burdens on future generations to pay for their pet projects. If the government didn't spend so much money, they would not need so much money. Here is the article.

States Look to Tobacco Tax for Budget Holes

Published: April 21, 2008

To keep the state’s landmark universal health coverage plan afloat, Massachusetts lawmakers are looking to tap an increasingly popular source of financing for health-related initiatives: tobacco taxes.

If the state raises its tax by as much as $1 a pack, it will join New York — and possibly a number of other states — in enacting significant increases this year. The speaker of the Massachusetts House, Salvatore F. DiMasi, a Democrat, pushed the increase, to $2.51, through the chamber this month, and the State Senate president, Therese Murray, and Gov. Deval Patrick, also Democrats, have signaled support.

The $175 million in projected revenue would be used to shore up the state’s year-old mandatory health insurance plan. State officials say the plan, which is the first to require that individuals have coverage, is over budget because enrollment has been higher than expected for state-subsidized insurance policies offered to low- and middle-income workers.

Continue reading the article here.

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