Rossputin.com: Rational Thinking About Our World

see "Senate panel OKs tobacco tax hike to help insure kids"
http://www.latimes.com/news/nationworld/nation/la-na-kids20jul20,0,1563983.story?

The Senate Finance Committee voted 17-4 yesterday to reapprove SCHIP (State Children's Health Insurance Program) and finance it with a massive tax increase on cigarettes and cigars.

Not only does the cigarette tax represent a complete misunderstanding of the proper role of government, but it is also a ridiculously regressive choice of tax to fund a program for the poor.

On the other hand, is it really a program for the poor?

SCHIP is generally supposed to provide public insurance for children in families which are below twice the federally-defined poverty level.

But what is happening with too much regularity is that states are using SCHIP to implement HillaryCare by stealth. At least nine states allow enrollment for families which earn 300% of the federal poverty level or more, and Congress is considering allowing SCHIP enrollment up to 400% of the poverty level, or nearly $80,000 of income. Are these the people that a plan to cover impoverished children should be subsidizing? At least as ridiculously, fifteen states use SCHIP to cover adults. (What part of "Children's" don't they understand?)

Furthermore, a recent study estimates a 60% "crowd-out effect" although I have generally heard numbers closer 30%, implying that for every 10 people going on taxpayer-funded insurance, between 3 and 6 of them dropped out of private insurance to get there. For them, it appears there is such a thing as a free lunch.

Funding government through cigarette taxes has the perverse effect of getting government addicted to tobacco. An interesting piece by the Heritage Foundation posits that because people will buy fewer cigarettes due to higher prices and general trends away from smoking, Congress will need over 20 million new smokers in a decade in order to be able to fund SCHIP without having to revert to substantial income tax increases or program cuts. If it came to that, which choice do you think is more likely?

All in all, we must hope that President Bush is as good as his word and that he vetoes this legislation if it gets to his desk. Even if he does, there are enough frightened Republicans in "moderate" states who might vote to override the veto so they can't be accused of hating poor children.

SCHIP is nothing more than the camel's nose of socialized medicine getting into the tent of federal and state governments. There is nothing that can come from it other than more massive bloated bureaucracy, huge budget deficits, and demands from politicians that we must all give more of our income to fund their vote-buying schemes and their utter lack of both fiscal discipline and respect for our Constitution.