TAX TAX TAX, Obama’s New Budget

Posted by on April 17, 2013
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uncle samAs most Americans know, President Obama proposed yet another budget plan last week that just didn’t quite add up.  As we all know, his track record with passing budgets is less than stellar to say the least and this will likely be just another Obama budget plan shot down, even by his own party. We Americans listened last week as Mr. Obama preached the same old story of the ” top 2% paying their fair share”, and he will continue to use this justification because it’s the only argument he has. The fact is, Mr. Obama simply can’t balance a budget!

In Obama’s latest proposal, he claims to add only $580 billion in new taxes over the next ten years.  Again, he attacked the wealthy preaching that they must pay their “fair share”.  But what he failed to tell the American people was the actual amount of tax dollars proposed on the budget and exactly where that money would come from.  After a closer look by multiple economic and financial experts, it was concluded that a more accurate number in tax dollars with the new Obama budget tallies well over $1 trillion.  I tend to agree with the Economists and Financial experts over a community organizer, but that’s just me.

Obama’s new budget would not only raise taxes on our nation’s elite as he would have you believe, it would hit each and every American hard.  One example being utility bills.  We all get frustrated when that big electric or gas bill shows up in the mailbox, well if Obama’s new budget passes then be ready to pay even more.  Just one tax hike that’s hidden in the fine print of his latest plan is another attack on fossil fuel driven power.  New taxes, fees and regulations will send your utility bills through the roof.  That is, if you have natural gas or are on a coal driven electric grid, which many of us are.  And just to be clear, the utility companies are not going to eat these losses.  They will simply pass the buck straight down to you, the consumer.

Taking an even closer look, I found something in Obama’s new budget plan that could potentially destroy an entire industry, Small Family Tobacco Farmers.  In his new plan, Obama proposes a $78 billion national tax hike on cigarettes, which works out to roughly 94 cents per pack.  Over the past 30 years, tobacco sales have consistently declined while farming costs have dramatically surged over that same time period.  However, cigarette manufacturers and Uncle Sam have been able to continue pulling the same number of cookies out of the jar while the independent farmer struggles to make ends meat.  Is this really fair? In this “fair share” world you have us living in Mr. Obama.

cigarette ash

While small family and private tobacco farmers try to keep their head above water, it is true that the manufacturers that produce the cigarettes and the Federal Government continue to record great annual profits.  Farmers themselves have not seen the same type of financial reward from the very crop they grow since the late 70’s.  And from the studies i have found, small family tobacco farms may be obsolete sooner than later.   In 1978, there were 188,650 small family tobacco farms operating in the United States.  Fast forward to 1997 and that number had dwindled to just 89,700.  A decline of more than 50% in fewer than 20 years.  Shocking, I know.  There is no current data available on the specific number today, but if you simply do the math, it’s safe to assume we’ve experienced the same rate of decline over the past 16 years.  Which means there would be approximately 45,000 small family tobacco farms operating in 2013 in the United States, however it could be far less.

drying tobaccotobacco map

 

We all learned the basic principles of supply and demand while receiving our education, so even Mr. Obama should have an understanding of this as well.  Tobacco users will continue to use tobacco, thus creating high demand.  Continuing to raise taxes on such products does not deter the user, it simply makes it more difficult for the little guy to earn a living.  Unless something unforeseen happens, this threat to small family tobacco farmers is very real and will all but eliminate the traditional auction system of purchasing tobacco leaf directly from the farmers that grow the crop.    Cigarettes will continue to be manufactured, distributed and sold to consumers for use.  This is something that can never be stopped, however, one crucial player will likely be left out of the financial windfall.  You guessed it, Small Family Tobacco Farmers.

kentucky tobacco


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TM is a small government conservative who strongly supports our troops, Israel, and our founding documents. Follow TM on Twitter