For any of you that ever had any doubt about what is coming at you from a million different angles as far as tax hikes, here is just one little example.

This is from house bill (SCHIP), HR2 which is the first version of socialized health care, that you are paying for which originally was supposed to be for children but now includes illegal aliens and most people up to the aga of 25 living at home.

The cigarette tax rate goes from $.39 per pack to $1.00 per pack; A 256.41% increase!
The tax on snuff goes from $.585 per pound to $1.50 per pound; A 256.41% increase!

The tax on pipe tobacco goes from $1.0969 per pound to $2.8126 per pound; This is a 256.41% Increase! (not a coincidence you think?)

The tax on RYO (cigar tobacco) goes from $1.0969 per pound to $24.62 per pound (not a typo). This is a 2,244.50 % increase!

Now remember the Revolutionary war was basically touched off by a 5% increase in the tea tax which is why we now drink coffee. Let me put this another way, our forefathers realized the importance of not allowing this to happen and they were willing to die and to start a war over it and that is how we became the US of A. Now I am not saying that you should go do any such thing, but it is food for thought about the importance our forefathers put on “No Taxation Without Representation” even though it is your representatives that are doing this. Hmmmm….

So no matter what you hear about politicians lowering taxes, you will know otherwise. My prediction is that you will see this repeated thousands of times over the coming 4 years.

The really bad part about it, is that it will probably put over 100,000 people out of work in legitimate industries in the US alone. While it is Politically correct to pick on smokers even though our new President smokes 3 packs a day (what you did not know that? The press was nice enough not to print pictures of him smoking though for the kiddies and all).

Believe it or not, there has not been one study linking the smoking of cigars or untreated tobacco to the same amount of health risks as to the treated tobacco used in cigarettes which is rather ironic.

Actually, the studies of cigar smokers actually has them having about half the problems of cigarette smokers which was rather a bit embarrassing. Probably because you don’t normally chain smoke smoke a cigars or pipes and there are no chemicals infused in the tobacco.

Prediction:

Whatever the case may be as I have noted time and time again here, when you raise taxes you always decrease revenue eventually and this one flat out is going to put over 100,000 of people out of work.

The kicker is that this is going to happen time and time again and it is going to bleed the economy dry with paper cuts and even those will eventually do the trick. What this basically does is put more and more power into the politicians hands.

The Play:

So, if you have any tobacco stocks, go short or by puts.

Name

Now, the other big tobacco companies overseas stand to gain here if you want to go long and buy stock or options.

Although, these puppies (tobacco companies) have been holding their own in spite of the fact that politicians continually go in and blackmail them and shake them down for billions at a time, they still keep chugging along. While the tobacco companies thought that by agreeing to pay them billions starting back in the Bill Clinton era, what they did not realize is that once the politicians got that money from them, like all good blackmailers, they keep coming back for more money. Honestly, if tobacco is really so bad for people, and they are really worried about the poor children and it killing them, then why not just outlaw it?

If it was any other chemical or product that did what they say it does, it would have been banned years ago. Think about it, supposedly Cigarettes kill 440,000 people each year.

Can you imagine if Detroit manufactured a car that did that? How long would it be on the market? About 2 seconds.

I am just pointing out the Hypocrisy here and but then again there is billions of dollars still to be plundered.

If people want to smoke, go for it. It is still kind of a free, well OK, not so much any more, a free country.

Anyway, go buy some puts and sell short and make hay while the Taxes are rising! There are going to be lots of opportunities like this in the coming years.

Also I want you to know, you are all smart people here and as hard as it is sometimes and will be, probably as hard as it is to give up smoking for some people, I am going to stop with the political commentary. Anyone with half a brain can figure out what is what and who is doing it. I am just going to point out the laws and the new taxes that are going to be involved or the industries they are going to hurt, which is what they do as when is the last time any law was ever passed that actually helped companies? Stumped you didn’t I… LOL All I am going to do from now on is point them out and then point out how to make money from them. That is it….

There are plenty of places to go to get political commentary and there is going to be a lot of it I have a feeling. Basically what is happening is that capitalism as we know it is under attack. Make no bones about it and it is going to create chaos of proportions that have not been seen since the 1930’s. It is going to hurt a lot of people sure, but just like in the 30’s, for those in the know there has not been such an opportunity to become wealthy since then unless it was in the 80’s under Ronald Regan but for totally different reasons.

So strap yourself in and get ready to ride the unprecedented wave of government regulation, intervention, and taxation the likes of which unless you were alive in the 30’s have never seen before. Even so, I believe that it will surpass what happened even then. If you don’t chicken out and you use your noodle, there are millions to be made.

This entry was posted on Wednesday, January 14th, 2009 at 10:56 am and is filed under Big Fat Fibber, Economics, Political Stupidity, Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.