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Author Topic: PROMISES, PROMISES: Obama tax pledge up in smoke  (Read 811 times)

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Offline fish

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PROMISES, PROMISES: Obama tax pledge up in smoke
« on: April 02, 2009, 12:41:46 AM »

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WASHINGTON (AP) - One of President Barack Obama's campaign pledges on taxes went up in puffs of smoke Wednesday.  The largest increase in tobacco taxes took effect despite Obama's promise not to raise taxes of any kind on families earning under $250,000 or individuals under $200,000.  This is one tax that disproportionately affects the poor, who are more likely to smoke than the rich.  To be sure, Obama's tax promises in last year's campaign were most often made in the context of income taxes. Not always.    "I can make a firm pledge," he said in Dover, N.H., on Sept. 12. "Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes."  He repeatedly vowed "you will not see any of your taxes increase one single dime."  Now in office, Obama, who stopped smoking but has admitted he slips now and then, signed a law raising the tobacco tax nearly 62 cents on a pack of cigarettes, to $1.01. Other tobacco products saw similarly steep increases.  The extra money will be used to finance a major expansion of health insurance for children. That represents a step toward achieving another promise, to make sure all kids are covered.  Obama said in the campaign that Americans could have both—a broad boost in affordable health insurance for the nation without raising taxes on anyone but the rich.  His detailed campaign plan stated that his proposed improvement in health insurance and health technology "is more than covered" by raising taxes on the wealthy alone. It was not based on raising the tobacco tax.  The White House contends Obama's campaign pledge left room for measures such as the one financing children's health insurance.  "The president's position throughout the campaign was that he would not raise income or payroll taxes on families making less than $250,000, and that's a promise he has kept," said White House spokesman Reid H. Cherlin. "In this case, he supported a public health measure that will extend health coverage to 4 million children who are currently uninsured."  In some instances during the campaign, Obama was plainly talking about income, payroll and investment taxes, even if he did not say so.  Other times, his point appeared to be that heavier taxation of any sort on average Americans is the wrong prescription in tough times.  "Listen now," he said in his widely watched nomination acceptance speech, "I will cut taxes—cut taxes—for 95 percent of all working families, because, in an economy like this, the last thing we should do is raise taxes on the middle class."  An unequivocal "any tax" pledge also was heard in the vice presidential debate, another prominent forum.  "No one making less than $250,000 under Barack Obama's plan will see one single penny of their tax raised," Joe Biden said, "whether it's their capital gains tax, their income tax, investment tax, any tax."  The Democratic campaign used such statements to counter Republican assertions that Obama would raise taxes in a multitude of direct and indirect ways, recalled Kathleen Hall Jamieson, director of the Annenberg Public Policy Center at the University of Pennsylvania.  "I think a reasonable person would have concluded that Senator Obama had made a 'no new taxes' pledge to every couple or family making less than $250,000," she said.  Jamieson noted GOP ads that claimed Obama would raise taxes on electricity and home heating oil. "They rebutted both with the $250,000 claim," she said of the Obama campaign, "so they did extend the rebuttal beyond income and payroll."  Government and private research has found that smoking rates are higher among people of low income.  A Gallup survey of 75,000 people last year fleshed out that conclusion. It found that 34 percent of respondents earning $6,000 to $12,000 were smokers, and the smoking rate consistently declined among people of higher income. Only 13 percent of people earning $90,000 or more were smokers.  Federal or state governments often turn for extra tax dollars to the one in five Americans who smoke, and many states already hit tobacco users this year. So did the tobacco companies, which raised the price on many brands by more than 70 cents a pack.  The latest increase in the federal tax is by far the largest since its introduction in 1951, when it was 8 cents a pack. It's gone up six times since, each time by no more than a dime, until now.  Apart from the tax haul, public health advocates argue that squeezing smokers will help some to quit and persuade young people not to start.  But it was a debate the country didn't have in a presidential campaign that swore off higher taxation.