Wednesday, May 13, 2009

Here it Comes: The Method to Pay for the Government Money Madness

Sin taxes are coming.

We already tax cigarettes at an incredible rate (which is growing as more people quit, but more on that some other time). Is smoking a sin? According to the goverment it is and so it is taxed.

The government wants to overhaul the health care system at an estimated $1.5 trillion over 10 years (like that number will hold up). So to pay for it, peopple like me, a relatively healthy 40 year old who doesn't smoke, doesn't drink that often (a beer or two on a dinner out--which doesn't happen too often) but with one real bad habit--I like to drink Coke. Now the government is going to consider that a sin and tax me for it. Or at least the Senate Finance Committee is thinking about it.
On Tuesday, the Senate Finance Committee peeked into vending machines and liquor stores, company payrolls and health savings accounts, looking for a mix of tax increases and spending cuts as a way to pay for a health overhaul — which could cost more than $1.5 trillion over 10 years.

Experts thought the big debate might be public plan vs. no public plan. But that may well pale in comparison to the difficulty of settling on a way to finance health care reform.

“I wish there were a number of painless options,” Robert Greenstein, executive director of the Center on Budget and Policy Priorities, wrote in his prepared testimony. “There aren’t.”

There appeared to be a bubble of support among the experts for taxing bad behavior, including a $2 tax on a pack of cigarettes and a higher excise tax on alcohol.

But soda and sugary drinks found a friend Tuesday in Sen. Chuck Grassley (R-Iowa), the ranking member on the Finance Committee.

He categorically rejected the idea during a conference call with reporters.

“No,” he said swiftly, when asked if there was any chance of taxing it. “I think, quite frankly, the only reason it’s being brought up is to get it shot down early so it doesn’t become part of the debate. I don’t think it’s going to have any legs at all.”

Still, it’s easy to see why the bad-habits tax was so tempting: Taxing tobacco, junk foods and alcohol could raise $600 billion over 10 years.
I like Sen. Grassley, but sure he is not so naive to think the the Spend-crats won't support their spending habits by taxing anything they don't like? At $60 billion a year in revenue, you can bet it will happen. Keep in mind that a federal sin tax will be paired with a state and probably local sin tax, in addition to the sales taxes already in place.

The result--that $1 coke on the McDonald's dollar menu will probably cost you another quarter if not more in taxes.

1 comment:

Anonymous said...

Gee. a 'sin tax'..No one has mentioned that those in Washington take a 'pay cut' of no less than 20%..considering the large pay check to the small amount of work being done.. just call it a 'sin cut'. Also, Federal employee's..isn't health care provided by the Fed. Gov't.? If so, isn't it time the employee's pay their own insurance? And if the National Healthcare goes thru,,won't the Fed. employee's be under that program? That cost saving's can be put to the new cost of insurance. See?? in just a few minutes I spoke of ways to cut the waste and put it to good use. It's called 'cutting the fat'.