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Non-Tech : Philip Morris - A Stock For Wealth Or Poverty (MO) -- Ignore unavailable to you. Want to Upgrade?

To: Christopher White who wrote (1506)	5/4/1998 3:14:00 PM
From: Xpiderman	Read Replies (1) \| Respond to of 6439

Tobacco Tax Talk Washington Post Monday, May 4, 1998; Page A22 THE TOBACCO companies and others opposed to a tobacco tax increase say it would be regressive, which is true. They also object that it would add to federal revenues and thereby lead to an expansion of government programs. To solve the second problem, some Republicans would compound the first. House Speaker Newt Gingrich and Ways and Means Committee Chairman Bill Archer, among others, propose that the proceeds of any tobacco tax increase be returned to the public in the form of an offsetting tax cut. They want at least part of the cut devoted either to improving health care or to helping people buy it. Mr. Archer has suggested such steps as allowing individuals to take larger deductions for out-of-pocket health care costs, including insurance premiums, and giving corporations a health care research and development tax credit. These may all turn out to be defensible ideas. But much of the benefit would go to people who are better-off, because they are the ones who owe and pay the taxes the chairman would reduce. The less well-off have long since been exempt from income tax. Instead of being used to defray the general cost of government, an excise tax increase falling disproportionately on lower-income people would be used to finance an income tax cut for those on higher rungs. Congress should enact a tax that will have the requisite deterrent effect on smoking. Then it can worry about what to do with whatever money the tax may raise. The decision should be made on the basis of public health, not whether the tax raises more or less money than members might otherwise prefer. The president would use the money to help finance his proposed child care and other initiatives, which many Republicans oppose. But tobacco policy should not become hostage to that debate, any more than the Republican desire for tax cuts. Mr. Archer can make a case for some of the tax cuts he is advocating, just as the president can for the stepped-up child care subsidies he has proposed. Tobacco policy shouldn't depend on those arguments, either. The Senate as part of its budget resolution voted for a kind of compromise or fiscal truce. It would set aside any increase in the tobacco tax to pay future Medicare costs, meaning use it for now to pay down the debt rather than to finance either a spending increase or tax cut. That's not the worst idea we've heard all year. washingtonpost.com