Several years ago at the paper I used to work for in Illinois, some of us in the newsroom were batting around the ideas legislators had been floating to fix the state budget.
If you think Wisconsin's two-year, $3.3 billion projected budget deficit is bad, it's small potatoes compared to the Land of Lincoln. Its one-year deficit is estimated to reach about $15 billion by June, and the state has long been adept at a kind of budgetary sleight of hand that depends heavily on kicking the problem down the road.
But the main issue that day was a proposed increase in the cigarette tax, a common way for governments to raise money and still be able to say they haven't raised taxes — as in taxes, like income and sales taxes, that people other than nicotine addicts pay.
Over about the last decade, states have raised cigarette taxes more than any other, Arturo Perez, a fiscal analyst with the National Conference of State Legislatures, told me last week, although the tax brings in comparatively little revenue.
I said that day in Illinois that a
cigarette tax increase is basically a tax on the poor because the poor are more likely to smoke — as demonstrated, for example, by a 2009 study by the UW-Madison Center for Tobacco Research and Intervention that found that 42 percent of adults in some of Milwaukee's poorest neighborhoods smoked. Compare that to about 21 percent of adults nationally.
One of my colleagues disagreed. He said a cigarette tax is a "stupid tax," as in if you don't have the brains to stop paying for the privilege of slowly killing yourself, perhaps you deserve what you get.
This is a concept I struggle with anytime lawmakers start talking about transferring large amounts of capital from America's more or less permanent underclass to the government or some other moneyed interest.
And for that reason, I'll be interested in seeing what Beloit does with a proposal to provide much-needed employment, economic development and tax revenue by building an Indian casino, as well as whether the Republicans taking over state government will weaken a law passed last year to regulate so-called predatory lenders.
Because both fall into the poor vs. stupid quandary.
Walk into any casino outside the Las Vegas strip and it becomes pretty clear pretty fast that the people pumping quarters into the slot machines are not exactly the types with a lot of disposable income. A study released in February by the Lehigh Valley Research Consortium — part of a Bethlehem, Pa.-based association of colleges — found that almost half of those with incomes under $20,000 said they were likely to visit a casino soon to open in their area.
That's in contrast to the 20 percent of people making over $100,000 who said they likely would go.
Meanwhile, the opportunities for legalized gambling — via slot, scratch-off, etc. — have been steadily increasing nationwide.
Payday and auto title loans are by definition aimed at people who don't have enough money to pay relatively small (for the rest of us) bills and thus must rely on short-term loans at exorbitant interest rates secured by either their transportation or their paycheck.
But does that mean gambling and short-term loan providers are intrinsically unfair, and thus ripe for government oversight or outright bans? Seeing as how it's no secret that even the loosest slots' odds are tilted pretty heavily toward the house and that any person with an eighth-grade education should know the ramifications of carrying a loan with a 300 percent annual interest rate, do the poor, to put it bluntly, deserve what they get?
To be clear, I am not equating poverty with stupidity, just as I would not equate wealth with intelligence (for by that measure, Paris Hilton should be living under a bridge).
It's just that with a new Legislature and governor set to begin tackling the state's problems on Monday — shifting from total Democratic to total Republican control — the question of who pays is sure to come up again. It is, in public policy matters at least, arguably the only question there is.
Perhaps the poor, especially those getting government assistance, shouldn't be pitied if they're doing things clearly counterproductive to improving their financial lot — like buying cigarettes and lottery tickets or relying on predatory loans.
So feel free to dispense with the pity. But be aware that it's probably just as counterproductive — for all of us — to kick them while they're down.
