[freedomtowernight_edited.jpg] 26th Parallel: SCHIP Up In Smoke

Saturday, October 27, 2007

SCHIP Up In Smoke

This morning's column by Herald politics columnist Beth Reinhard is so full of blog fodder that I just couldn't resist.
Tobacco tax clouds debate on kids' health

By Beth Reinhard

A cigar-store Indian and a pungent aroma greet customers at Miami's Sosa Cigars, next to the famed Versailles restaurant.

Boxes of cigars labeled Partagás, Cohiba and Padrón rise from floor to ceiling. A table for dominoes invites smokers with time to spare. Buy a humidor, bottle of wine or guayabera to complete the look of old Havana.

''Take a picture,'' quipped U.S. Rep. Mario Díaz-Balart, one of three Miami Republicans who oppose legislation expanding a popular children's health-insurance program, partly because it relies on higher cigar taxes. ``They're not going to be around much longer.''

Under a plan to pump $35 billion into the so-called SCHIP program, federal taxes on cigars would soar from 5 cents to an average of $3 per cigar, an increase of about 6,000 percent. Cigarette taxes would rise 61 cents, to $1 per pack.

''Why are they picking on us?'' demanded Sergio Pereira, who owns the Don Sergio Ramar Cigars factory in Miami. ``Cuba is rum, sugar and cigars.''

In a flame-fanning tirade on Spanish-language radio last week, Díaz-Balart called the tax hike an ''attack on the Cuban-American community.'' He added: ``It would hurt an industry specifically in Miami-Dade, in South Florida, an industry that is almost entirely Hispanic: those who make cigars by hand, which is a cultural tradition. That industry will not survive.''

Let's pause for a moment here. I like Mario Diaz-Balart, but his sound byte calling the tax an attack on the Cuban-American community is nothing short of ridiculous. I realize politicians like to indulge in hyperbole, but that one takes the pastelito de guayaba, Mario.

Let's proceed.

But put aside the Chicken-Little warnings, the appeals to ethnic pride and the romantic image of the family-run storefront. Consider that the program would extend health benefits to 10 million children on the strapping back of a deadly industry.

Whoa, one second here. At the surface, who could argue with Reinhard? Of course, that's what proponents of the bill want you to do. They just want us to look at it on the surface, because once you start digging, the pitfalls become plainly evident.

''Raising the price may cause some individuals to stop smoking, which would be a good thing,'' said Bill Corr, executive director of the Campaign for Tobacco Free Kids. ``We have a product that is designed to addict and kill, and we have to take steps to protect the public health.''

Corr is affiliated with a nonprofit that tracks tobacco industry contributions and found that members of Congress who opposed the SCHIP expansion have received ''four, five, six times as much'' money than those who supported it. Díaz-Balart, and U.S. Reps. Lincoln Díaz-Balart and Ileana Ros-Lehtinen, have received tens of thousands of dollars from tobacco over the past decade.

''They chose cigar makers over kids and politics over children,'' said Democratic Rep. Debbie Wasserman Schultz of Weston. ``I think they made a grievous mistake.''

Alright Debbie. Join the hyperbole club. Not as bad as Mario's, but not too far behind.

The national Democratic Party and left-leaning special interest groups have seized on SCHIP as a club to browbeat the Miami Republicans and other potentially vulnerable members of Congress. Radio ads in their districts warned them to ''to choose our kids.'' House Speaker Nancy Pelosi will be in South Florida next week to recruit potential challengers, including former Hialeah Mayor Raul Martinez.

The three Republican lawmakers have said repeatedly that they support the insurance program, but that the legislation doesn't go far enough to prioritize the poorest children, depends heavily on tax revenues from new smokers and enables 2 million children to replace their private health benefits with government subsidies.

Finally, all the way down near the end, we get some real substance behind the argument against SCHIP. Too bad only the patient reader would even get this far.

They voted no this week, contributing to the failure of Democratic leaders to muster enough votes to override President Bush's veto.

The cigar store Indian isn't going anywhere. The men in Little Havana will keep on smoking, and the children will keep on getting sick.

Bing! Reinhard wins the "drama queen" award of the week. Sorry Reps. Diaz-Balart and Wasserman-Schultz.

From reading this, it's obvious that I'm against the SCHIP expansion. Of course, that will also label me as being in favor of Big Tobacco instead of our children, right?

The SCHIP expansion would make families making up to $80,000 a year, much higher than the poverty level, eligible to receive the subsidy. It only takes a little common sense to figure out that a big chunk of those families in the upper end of that income scale already receive private health insurance for their children through their employers. It's also evident that those families making 60, 70 or $80,000 a year can afford a private health plan.

But wait! We're not taxing ordinary people, we're taxing smokers!

I have always been extremely skeptical of plans that depend on heavily taxing vices in order to fund well-intentioned projects. What happens when people kick a bad but perfectly legal tobacco habit because of a huge increase in taxes? Where then would the funding be for this bloated government subsidy? That's right. Those same people who are currently advocating so hard for children to not take up smoking will be seen banging on the doors of schools with cartons of cigarettes, begging kids to take up that nasty habit. After all, it's about children not getting sick.

I know, that last part was a bit of hyperbole on my part, too. Fits with the theme of the post, though.


Blogger nonee moose said...

Robert, you do know that the folks that estimate the amount of per unit tax necessary to fund the program also factor in the amount of "suppression" which will take place as the unit tax amount rises?
Granted, it does not eliminate your basic premise, which is always the case with "sin taxes", but it does offer some level of mitigation. Also, there are the marginal benefits derived from the curtailment of the activity itself-- theoretically, a reduction in smoking results in a decrease in conditions and necessary treatments caused by the smoking, which results in decreased funding requirements over the long haul. Just thought I'd mention it.

The one question I haven't been able to find the answer to is whether the program contains eligibility offset language, where the "$80k family" which actually gets employer benefits wouldn't be eligible for the program. Something like that would go a long way towards focusing benefits on the truly needy.

Finally, I totally agree with you that this level of exaggeration and ethnic hyperbole is borderline insulting. In my opinion, it smacks, arguably, of desperation.

11:06 AM, October 27, 2007  
Blogger The Florida Masochist said...


I think voting against S-chip is bad politics for the GOP. Most of the points you make are well and good, trouble is voters with the help of the Democrats, are going to see this as Republicans voting against insuring children. Both sides know a compromise is going to be hammered out but that's not going to prevent the Dems from using this issue against Republicans in 2008. It is going to hurt and the GOP had enough problems already.

For Congresswoman Díaz-Balart, she will get one of my Knucklehead awards(I'll hat tip back to you) either tomorrow or Monday. Her comment about this being an attack is just dumb.



2:24 PM, October 27, 2007  
Blogger Robert said...


Sure the GOP will look bad, but it's one of those things where you have to stick up for your principles, regardless of how much exaggeration is going on on both sides.

BTW, Mario Diaz-Balart is a HE...just want to make sure you get that right for your knucklehead award! ;) While you're at it, you could make the award bipartisan and include Wasserman-Schultz as well. Thanks.


I realize that politicians plan and scheme these things well in advance. And sure, you can argue that rising tobacco costs may force people to quit the habit en masse and make for a healthier populace, thereby decreasing the costs of health care. But I don't think anyone truly believes that we'll see smoking levels drop into the single digits, short of making smoking illegal nationwide (it's started in California so that may not be as far fetched as it sounds).

3:42 PM, October 28, 2007  
Blogger nonee moose said...

I agree. That was my point of calling them marginal benefits.

But, then why do you make a point of highlighting how crazy it sounds to tax vices?

What happens when people kick a bad but perfectly legal tobacco habit because of a huge increase in taxes? Where then would the funding be for this bloated government subsidy?

Or was that part of you hyprbole too?

8:19 AM, October 29, 2007  
Blogger Robert said...


The hyperbole is at the end of my post. The politicians can plan this out all they want, but it's still wacky to me.

1:06 PM, October 29, 2007  
Blogger Henry Gomez said...

You don't think a $3.00 per stick tax on cigars would be disastrous for the industry?

8:55 PM, October 29, 2007  
Blogger nonee moose said...

Is that what it works out to? Then, yes it would be disastrous. I had heard 10$ per box. Where is that $3/per info?

2:45 PM, October 30, 2007  
Blogger Henry Gomez said...

From the article Robert quotes in the post:

Under a plan to pump $35 billion into the so-called SCHIP program, federal taxes on cigars would soar from 5 cents to an average of $3 per cigar, an increase of about 6,000 percent. Cigarette taxes would rise 61 cents, to $1 per pack.

12:28 AM, October 31, 2007  
Blogger Srcohiba said...

this tax is a crock of shit. Robert thanks for posting. I had not realized they were trying to tax cigars. They enacted this same legislation in california courtesy of the meathead. It put retailers out of business.

it is a big mistake if they think the tax will help kids. pure BS. What will happen is it will put folks out of business. In essense, this is a way to ban cigars just like these piss ant libs do with their anti smoking bans thoughout the country.

under this moronic law, a box of cigars would rise by $ 60 just in taxes. No one would be able to buy a box. A normal box will run between $60-100. So we add $60 in taxes on this? f**k any politician who passes this crap.

it's like when they had the luxery tax. it flopped cause people stopped spending the money on it.

man i'm so pissed right now and this is why I hate liberals. tax tax tax.... they know nothing else.

5:30 PM, November 01, 2007  
Blogger Henry Louis Gomez said...

Still think this is a joke?


10:29 AM, January 15, 2009  

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