The Palmetto Insider

The blog of the South Carolina Policy Council

Cigarette Tax Hike Needed to Pay for More Corporate Welfare

with 2 comments

We’ve already written on why the cigarette tax hike is a job killer. For those of you who didn’t catch that piece, the House budget (proviso 90.14) includes a 30-cent-per-pack tax increase that ostensibly will be used to recoup Medicaid operating deficits. After funding reaches 1.5 percent of Medicaid appropriations, however, “excess” revenue will be channeled into the General Reserve Fund, and then the General Fund.

As we wrote earlier: “It is misleading to suggest that cigarette taxes must be increased to help pay for Medicaid. If funding Medicaid were a priority, lawmakers would be cutting non-essential programs first, instead of eyeing a cigarette tax increase.” Three days later, The State published a predictable article long on impassioned pleas for more Medicaid funding and short on the big picture that state spending is out of control.

But even if we believed that raising the cigarette tax was about paying for Medicaid, last week’s news that South Carolina will likely receive a $200 million federal bailout should put even that claim to rest. Consider The State reporter John O’Connor’s lead: “The S.C. House will not have to tighten the belt on state spending quite so much when legislators begin debating the budget next week.” The article does not mention the cigarette tax, but notes that the federal funds will be used to assist the disabled, poor children and Medicaid patients. Apparently the cigarette tax is still necessary – to fund even more Medicaid services it seems.

Alternatively, we could cut spending. Not for the poor and the needy (and the children) but how about for Boeing, the Sembler Company and every other multimillion dollar corporation in line for a taxpayer funded subsidy or tax break? Or, how about cutting that $15 million from the budget (proviso 89.112) that the House plans to use “to provide more flight options, more competition for air travel, and more affordable air fares.” In other words, more taxpayer funded economic development – this time for the airline industry.

The question is really one of priorities. But legislators refuse to prioritize. And so taxpayers continue to be asked for pay for everything from retail malls to airline tickets to an ever more bloated Medicaid program that has long been out of control.

When is enough enough?


Written by Jameson Taylor

March 15, 2010 at 1:41 pm

2 Responses

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  1. […] The State as well, which asserted that without the tax increase Medicaid services could be cut. As we wrote last month, though, the real reason the cigarette tax was being increased was to subsidize the state’s […]

  2. if people want to kill themselves why make them pay more for it…


    April 20, 2010 at 1:43 am

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