Stunned? You’re not the only one:

“I thought there was a typo. I thought they meant 10 cents per cigar, not $10 per cigar. I was stunned like everyone else,” Sharp said.

Currently the tobacco tax is 4.8 cents per cigar and 39 cents per pack of cigarettes (1.95 cents each). The latest bill will raise those to $1/pack for cigs and $10/cigar. The increase of 150% on cigarettes is ridiculous but the cigar tax is off the scale.

The average aficionado smokes about three cigars a week at about $3 to $5 apiece, according to the cigar association.

The tax would mean that relaxing past time would go to $13 to $15 for the exact same cigars! Of course the true tragedy is that (as always) the poorest cigar smokers will be the hardest hit. For those that can’t afford the sweet nectar of a hand rolled smoke, machine made cigars typically run between 50 cents and a dollar apiece. So a poor man’s cigar relaxation costs about as much as everyday acceleration found in a Coke. Imagine paying $11 for a 16oz bottle of Coke.

With the tax the country’s cheapest cigars will instantly cost as much as the nicest your local humidor has to offer (which will then cost $20 instead of $10). In essence, taking cigar smoking away from the poor and allowing only on the rich to enjoy it. I thought the Democrats were supposed to give things to the poor.

And what about the tobacco worker’s (we always seem concerned about the tobacco farmers in this country) jobs? Hav-A-Tampa alone employs 900 workers in the Tampa area and doesn’t make a bad smoke. I coincidentally enjoyed their wares just last night (research for this article of course). I believe Eric Newman, who runs the Tampa business founded by his grandfather Julius Caesar Newman and employs many people in his small cigar factory said it pretty well:

“Why don’t we just go out of business?” Newman said. “Here, you can run our company, Mr. Government.”

Now what could possess such a flagrant taxation bill? Well the poor, sick, dying children – or so they would have you believe. This tobacco tax has been dubbed to help the children, but that’s a bit of slick marketing. This bill defines children as anyone 25 years of age and under.

Let me say that again: ANYONE 25 years of age and under. So if you are a 25 year old male that makes $82,000/year with a house wife of 23 and two small children, guess which of you are eligible for this coverage? All four of you. This bill is not helping “children”, or the “poor”, or the “uninsurable”. This is an end-run to get Universal Government Health Care covering the bottom fourth of the human age range. A few more bills like this and we will have Hillary-Care without the panic inducing name.

Thankfully, for tax payers and cigar smokers Bush has said he will veto the bill. But what happens after ’08 is anyone’s guess.

• Cigarmakers in a panic
• Amendment to limit income level & age (failed)

California is looking to pass a law that would give EVERY baby a $500 savings account. And they do mean every baby, since it will be "regardless of their parents’ income or immigration status." I’m sorry, what? Come to America to have your baby illegals!! Not only will we allow your babies birth create an "anchor" for your immigration status – we’ll throw in $500 cash. Has the government gone completely mad?

Sadly, it gets much worse when you actually think about this proposal. Setting the illegals question aside lets look at the math behind this "encourage savings" project that will only cost California tax payers $285,000,000 each year. The article states that "If families added $50 a month to the state’s initial contribution, the savings account would grow to nearly $17,500 at 5 percent interest over 18 years." ACTUALLY, if you know how to use a financial calculator (and set it to monthly payments of $50 instead of yearly payments of $600), the account will really grow to $18,687 (though you are supposed to give back the initial $500 at that point so $18,187). What it fails to point out is that if families saved the $50/month WITHOUT the governments $500 it would grow to $17,460. Well suddenly all that growth doesn’t look quite as impressive does it?

Beyond that, you can simply visit your local bank to discover that a 5% savings account is a tad optimistic. I called my broker and found my current money market rate to be 4.875% – which is actually up with rising interest rates. So really 3-4% is a more realistic CD/savings account rate. Change the ROI to 3.5% and the governments magic $500’s interest drops from the already low $727 to a mere $438.

But wait, there’s more! When you take into account inflation the money is worth even less. Inflation in this country is typically 2-3%, so we’ll use 2.5%. This means $438 of free government interest in 18 years will be worth the equivolent of $98 in today’s money. Everyone give the governement a standing "O" – they came up with a way to give everyone $98 for college, and it only costs $285 MILLION dollars a year

Now I hate to beat a dead horse, but there are a few more glaring problems with this great idea. First of all, undoubtedly the program’s cost stated in the article only accounts for the actual $500 of savings multiplied by the number of babies born. On top of that you will also have the efficient government administration of millions of tiny savings accounts. Think social security. And speaking of social security, we all know what happend to the money being saved for the good of the people. That’s right all the money was raided and replaced with a thick stack of IOUs. Don’t think it won’t happen here.

If the government wants to encourage savings it should try teaching math in school. I mean practical math. Financial math. Barring that, it could run community service announcement ads extolling the virtues of savings. This would in the end prove less expensive and more effective than this bill.

What the government should really try to increase is INVESTING not savings. Let’s take our earlier example of $50/month for 18 years and instead of saving it at 3 or 5% lets invest it. A good mutual fund will average around 12% over the long run. Invested, that $50/month payment would grow to $37,893. Adjusted for inflation your looking at the buying power of $28,369. And since the government didn’t give you the wooping $500 head start, you can spend that money on anything you want – free of government restrictions. Oh but the government will take 15% of your gain in taxes to help them pay for programs that encourage illegal immigration -oh- I mean savings.

• California Bill Would Give Newborns $500 Savings Accounts