Alison's Window

Wednesday, July 25, 2007

Letter to my Senator re 20,000% increase in Tax on Cigars

This is an outrageous and poorly conceived bill on so many levels.

1. A tax increase has a dynamic effect on the sales of the taxed item. More tax, lower sales, so expected tax revenue from the bill will not be as high as projected (Look at what happened with the luxury tax on yachts a few years ago. Conversely, look at what happened when Presidents Kennedy, Reagan and Bush lowered income tax rates.)

2. Government should not supplant the private market and buy insurance for anyone, including kids. Enabling the parents to buy it themselves would be better, if a need for such government intervention can be justified somehow.

3. It appears Schip would expand coverage to kids from families at higher income levels than before, expanding government reach into the private sector health insurance market. Government should not be making personal decisions for people to "save them from themselves" and their alleged bad decisions.

4. Layering taxes on taxes to fund each new Congressional desire is fiscally irresponsible. Reduce spending somewhere else. Sunset the myriad tax laws that keep getting added to the code.