Smokers and Drinkers to the Rescue

[Welcome Industry Radar and Wall Street Journal readers!]

Some refer to them as lifestyle taxes. Others, sin taxes.

Regardless of what you call them, the folks in Washington want party animals to pay for health insurance for those who are currently uninsured.

On Tuesday, the Senate Finance Committee peeked into vending machines and liquor stores, company payrolls and health savings accounts, looking for a mix of tax increases and spending cuts as a way to pay for a health overhaul - which could cost more than $1.5 trillion over 10 years.

The same folks who have run Medicare and Medicaid into the ground now want to pick your pocket to pay for health insurance for the rest of the population. Isn't that special?

There appeared to be a bubble of support among the experts for taxing bad behavior, including a $2 tax on a pack of cigarettes and a higher excise tax on alcohol.

But soda and sugary drinks found a friend Tuesday in Sen. Chuck Grassley (R-Iowa), the ranking member on the Finance Committee.

Is Grassley a Coke guy or Pepsi guy?

Still, it's easy to see why the bad-habits tax was so tempting: Taxing tobacco, junk foods and alcohol could raise $600 billion over 10 years.

Of course that assumes folks keep smoking, eating and drinking at the same rate as now. At least when it comes to tobacco, as the price has increased over the years the number of smokers have declined.

For the good of the country, Congress wants to promote an unhealthy lifestyle.

And what is it about taxing tobacco to pay for health insurance any way? Back in February Obama signed a bill to expand SCHIP (Peachcare in Georgia) which is funded at least in part by an increased tobacco tax.

Treasure the tax benefits from your health savings account? Some experts say the accounts encourage "excess consumption" of health services - and committee Chairman Max Baucus (D-Mont.) agreed they're worth a look. Money in the pot: $60 billion over 10 years.

Do they just pull this out of their butt? Health savings accounts encourage excess consumption of health care?

"Doris, I was checking our HSA and it seems like it might be time for you to get that boob job you have always wanted. We got the money, so might as well spend it."

"The proposals that we have discussed," Baucus said, "will not come easily. The reforms that we are planning are not cheap. ... Finding money that we can all agree on will not be easy."

Here is a novel idea:

Since it is OUR money, why not give us a say?

"But the current tax exclusion (on employer paid health insurance) is not perfect. It is regressive. It often leads people to buy more health coverage than they need."

So high deductible, health savings accounts entice us to buy more health care than we need, and employer group plans tempt us to buy more health insurance than we need.

You can't make this stuff up.

More stupid government tricks.

Party on.

"La Plus ca Change" Update [HGS]: Some things never change.

PLUS: Awesome "Sin Tax' Slap Down at Joe Kristan's place. Ouch!