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POLITICS: White House

President Obama's tobacco tax hike: Is it about health or cash?

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Politics,White House,Brian Hughes,Politics Digest

President Obama's proposal to nearly double the federal tax on cigarettes, portrayed by the White House as a way to improve public health, is nothing more than a smoke screen to raise money, critics say.

Obama wants to increase the federal cigarette tax from $1.01 to $1.95 a pack and use the $80 billion in new revenue it would generate to expand preschool programs.

However, analysts questioned whether the administration can both deter smoking while making money from smokers.

"I really believe people will continue to indulge," said Anirban Basu, chairman and CEO of Sage Policy Group in Baltimore. "There has been a decrease in smoking -- and that's partially because of massively higher taxes -- but it's also a change in societal norms and anti-smoking marketing."

It's not the first time Obama raised the tobacco tax. In his first term, he approved a 62-cent increase in the tax, raising it to $1.01 a pack. And he's not alone. In addition to the federal tax, states impose their own levies on tobacco that further drive up the cost and expand government dependence on the so-called sin tax.

New York's tax on cigarettes has climbed to $4.35 per pack. Rhode Island set its tax at $3.50. Washington gets $2.50 per pack. Since 1999, every state but Missouri, North Dakota and California raised cigarette taxes.

Just a few blocks from the White House, Steve Henry, of Lorton, Va., took a drag from a cigarette and laughed at the suggestion that another tax would break his habit.

"It's an addiction," Henry said. "But hey, we're an easy target. Smoking is bad. So they keep coming for more money. I just wish they'd be more honest about what they're doing."

Health advocates say higher taxes are paying off, and the Centers for Disease Control and Prevention estimates that Obama's proposal would prevent roughly 230,000 kids from smoking.

"We know that it has the biggest impact on youth smoking, that young people are the most sensitive to changes in the price," said Cecilia Munoz, director of the Domestic Policy Council.

Health advocates insist that a decline in smoking rates would decrease health care costs -- though, on the flip side, longer life spans would drive up spending on retirement programs.

Not mentioned by the White House, however, is that the tax tends to be regressive, disproportionately hitting low-income people who Obama says are protected by his budget blueprint. In D.C., which maintains high rates of poverty, the average price of a pack of cigarettes would jump to more than $8 under the president's proposal.

"When the price of cigarettes increases, the activity doesn't decrease proportionately," Basu said. "The demand doesn't disappear."

bhughes@washingtonexaminer.com

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