Californians Reject Cigarette Tax Hike

Californians have rejected a measure to impose a state tax on cigarettes. Proposition 29, which would add an extra dollar a pack tax to cigarettes, was trailing on Wednesday by 50.8 percent to 49.2 percent.

The proposition, which would ostensibly raise $810 million a year for cancer research and smoking cessation programs, was leading in March; 67% of probable voters supported the measure. Then, a $47 million ad campaign directed by tobacco companies commenced, which made the race an apparent dead heat.

Opponents of Prop. 29 claimed that research dollars raised by the tax would be an "unaccountable bureaucracy dominated by political appointees" and would be spent outside of California. Supporters of the proposition responded that healthcare costs would be reduced by less smoking.

For Californians to reject a left-wing attempt to give government control over smoking is a shocking picture. Are there any more strange bedfellows than Californians and tobacco companies? Perhaps even California has discovered the virtues of liberty.


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The past several months have seen the price of gold slump even as the Fed and other central banks have accelerated their massive expansion of paper money. Gold is off about 20% so far this year with silver down almost 30%. The old adage--“don’t fight the Fed”--particularly comes to mind now because the US equity markets have been setting new highs during this same period. All of these gains are nominal, you understand, but for terrified American policy makers and investors, nominal is just fine.

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