Obama's First Tax Hike

Amanda Carpenter

2/4/2009 7:42:00 PM - Amanda Carpenter
President Obama approved his first tax hike today.

The bill he signed to expand the State Children's Health Insurance Program contains a provision to increase taxes on tobacco by a whopping 155 percent. That means the federal taxes on cigarettes have gone up an additional 61 cents a pack. This brings federal taxes on a pack of cigarettes to $1 per pack total.

(It also means the nation will need to maintain a steady level of smokers to subsidize kids health care, an unlikely outcome in light of a fledgling economy and increased taxes on the tobacco.)

Despite his pledges not to tax low-income Americans, Obama's tax increase on tobacco will disproportionately punish the poor, who are more likely to become addicted to cigarettes.

55 percent of smokers are considered "working poor" and one in four live below the poverty line.

“Tom Daschle and Leona Helmsley believe that only the little people should pay taxes,” said Grover Norquist, president of Americans for Tax Reform.  “Obama agrees; he just raised taxes on millions of lower-income Americans.  His central campaign promise was a lie.”