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A Sin Tax for Hezbollah
Governor
Blanco and others are embracing the idea of a “sin tax” to raise $120 Million
for teacher pay raises. This increase is expected to deliver $1000.00 per year
for our teachers, or $19.23 a week. The tax will target cigarette smokers,
alcohol and gambling. The cigarette tax will be an additional $.50 per pack. As
a “smoking, drinking & gambling sinner” myself, this will increase my taxes by
approximately $50 per month. If I want to continue with these vices then I will
have to reduce spending on other items or quit altogether. If I repent and quit
altogether, who is going to make up the difference? In this new sin tax, the
non-sinners need to pony up some money too. The funding of education, roads, or
whatever is common to all people, is the financial responsibility of EVERY
taxpayer, not just the ones that are sinning by smoking, drinking and gambling.
The State’s budget is $18 Billion dollars. Using population estimates, to put
that much money into perspective, it is equal to $334.14 per month for every
man, woman & child breathing the air of Louisiana. You can play with the numbers
but either way you’ll see that’s a pretty hefty budget, and it begs the
question, how much is being wasted?
The World Heath Organization, the World Bank, along with anti-tobacco alliances,
promote and encourage high tobacco taxes as a means to curb tobacco use.
Here’s a quote, “Price increases through
taxation on tobacco products are among the most effective interventions in
reducing demand, especially among youth and persons with low incomes.” Why then,
is the state using the strategy of the anti-tobacco alliances to generate “more”
revenue when it is in fact a widely accepted strategy for curbing tobacco use?
Perhaps it’s not about teacher raises after all!
There have been unintended consequences that have been felt by other states hard
bent on increasing taxation of cigarettes as a penalty. There is a real concern
for creating a black market for cigarettes as a direct result of higher taxes.
There is a disproportionate burden on low-income families and small business
owners. The taxation is causing smoke shoppers to shop elsewhere all of which
encourage a reduction in legitimate sales, which decreases revenue, causing
state budget shortfalls. This tax on cigarettes is not about teacher pay
raises. It’s about curbing tobacco use. It is the strategy of the anti-tobacco
movement and that will be it’s outcome. In the end there will no money for the
raises, and our government will impose another tax to cover the short-falls.
Sugar is proving to be a sinful and unhealthy product. Let’s tax that product
for a while!
How many more times are we going to use the “teacher pay raises” mantra to justify new taxes? It’s a worn out promise that only delivers a mere pittance of what it promises. Everyone forgets the last unfulfilled promises for teacher pay raises, and politician’s keep on using them as their springboard for new taxes.
Louisiana ranks 42nd, as one of the lowest tax rates on cigarettes. Why is that a bad thing? Louisiana is 12th highest on taxation on beer in the nation. That’s not high enough? Video poker is taxed at a rate of 32.5%. That rate is too low? We already have a sin tax in place. In fact, it’s should be a sin that we are being taxed so much. It would make more sense to grow our way to a solution and out of our financial woes and not try to tax our way out of all of our problems. It hasn’t worked yet!
It is estimated that cigarette smuggling is now a $10 - $17 Billion dollar industry that fuels organized crime and terrorists organizations alike. In the summer of 2000 FBI agents raided a house in North Carolina dubbed “operation smokescreen”. They found cash, weapons, including shotguns, rifles and an AK-47) documents written in Arabic – and cigarettes. Lots of them! The homeowner and recipient of the profits from the smuggling of cigarettes between North Carolina ($.05 tax per pack) and Michigan, ($2.00 tax per pack), was none other than, Mohammad Hammoud. Hammoud had alleged links to the Lebanon terrorist organization Hezbollah, which in turn is connected to Al-Queda and Osama Bin Laden. The cigarettes were delivered in vans to Arab owned convenience stores in Detroit netting upwards of $10,000.00 in profit on each trip. Simply by exploiting high tax differences. The US Justice Department tracked purchases made with cigarette smuggling profits, that were shipped to Hezbolah, and found purchases of night vision goggles, global positioning systems, laptop computers, aircraft design and analyses software and laser range finders, along with other goodies. All bought with proceeds from illicit cigarette smuggling sales. Apparently the anti-smoking groups are proud of what Michigan accomplished with its “black market incentive”, that it wants Louisiana to do the same.
This is the law of
“unintended consequences”. The taxation of any product or an attempt to drive
that product out of the legitimate markets, causes people to modify their buying
behaviors and this opens up a new set of tax avoiding opportunities to black
marketeers. It ain’t rocket science, it’s American History!
You’ll get no argument from me that smoking is a serious health hazard. But now,
it looks like anti-smoking efforts are creating a health hazard as well when you
take into account the goals of terrorist organizations such as Hezbollah and Al
Queda. It is all unintended consequences and a slippery slope for the smokers
and anti-smokers alike.
Any governor, elected official or other individual who embraces the idea of imposing a high tobacco tax as a means to generate revenue would do well to also heed the idea that: "Results are what you expect, and unintended consequences may be what you get."