Should the Working Poor Finance New Government Spending?

Should the working poor be forced to finance new government spending? This is the question asked by a new National Policy Analysis #220 paper, “A Taxing Proposition: Should the Working Poor Finance New Government Spending?”

The paper, written by Faye Anderson, a member of the African-American leadership group Project 21 and president of the Douglas Policy Institute, examines California’s Proposition 10, the brainchild of Hollywood actor/director Rob Reiner. Proposition 10 would impose $750 million in new taxes on Californians via a 50¢ per pack cigarette tax hike in order to fund new government social spending.

“Why should a low-income smoker be burdened with an average of $170 more per year in tobacco taxes to pay for redundant bureaucracies and social programs that have nothing to do with curbing youth smoking when the state is sitting on a $4 billion budget surplus?” asks Anderson, who is also a member of the California bar.

“Nationally, according to the U.S. Congress’ Joint Committee on Taxation, 53% of tobacco revenues come from people making under $30,000 and a 97% come from people making under $75,000, ” said Amy Ridenour, president of The National Center for Public Policy Research. “This means that more than half the new taxes required by Proposition 10 would be paid for by people making less than $30,000, and hardly any of the people paying the new taxes would make over $75,000. If California really needs a new state health commission and 58 separate new county health commissions, it should not look to the poor and the middle class to finance them.”

Other concerns about Proposition 10 include:

* According to the San Diego Union (10/14/98), Proposition 10 would “siphon off millions of dollars in tobacco tax revenues from existing state programs that combat teen smoking and fund breast cancer research.” These programs were funded when Californians voted for Proposition 99 in 1988, which increased tobacco taxes to pay for a variety of government programs.

* Only 6% of the tax money to be generated by Proposition 10 is for programs to reduce smoking. The rest of the $750 billion would be spent by bureaucrats unaccountable to anyone.

* The $750,000,000 in new taxes raised by Proposition 10 won’t be under the direct control of the legislature, and through the legislature, the people of California. Over time, the people of California could conclude that they want the $750 million spent on something other than 59 new boards and commissions — transportation, for instance — but the legislature would be powerless to make the change.

The National Policy Analysis paper “A Taxing Proposition: Should the Working Poor Finance New Government Spending?” is available on the Internet at or by calling David Almasi at (202) 507-6398.

The National Center for Public Policy Research is a communications and research foundation supportive of a strong national defense and dedicated to providing free market solutions to today’s public policy problems. We believe that the principles of a free market, individual liberty and personal responsibility provide the greatest hope for meeting the challenges facing America in the 21st century.