Beware the chance likelihood of unintended consequences. Or hell, maybe this was the intended consequence.

Tampa will lose part of its cigar heritage in August when Hav-A-Tampa shuts its factory near Seffner and lays off about 495 employees, closing a factory that has been operating since 1902.

Either way, Obama’s plan to use Federal taxes to pay for the State Children’s Health Insurance Program, or SCHIP (a federal program that provides health insurance to low-income children).

The money used to pay for SCHIP come mostly from a tax increase on tobacco and tobacco products. But what happens when the taxes for tobacco products get so high that businesses have to shut their doors?

However, the company attributed much of its trouble to the State Children’s Health Insurance Program, or SCHIP, a federal program that provides health insurance to low-income children. It is funded, in part, by a new federal tax on cigars and cigarettes. McKenzie couldn’t say how much sales of Hav-A-Tampa cigars had fallen off, but the numbers have dropped significantly, he said.

Previously, federal excise taxes on cigars were limited to no more than a nickel, said Norman Sharp, president of the Cigar Association of America trade group. The tax increase, which took effect April 1, raises the maximum tax on cigars to about 40 cents, Sharp said.

500 people just lost their jobs.

Because Obama and his economic team doesn’t seem to realize that you can only raise taxes and regulate businesses so much before they die.

The irony here is that the tax was created to pay for insurance for families that can’t afford to insure their children. I’ll bet a lot of those 500 people losing their job had insurance for themselves and their children. But now they can’t afford to insure their kids anymore because they have lost their jobs. The jobs that directly funded the program they need to help them insure their kids. Which means the program they need to help them insure their kids will soon not have the funding it needs because their are no jobs or businesses to tax to fund it.

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OTHERS:

Cato at Liberty:

President Obama broke his pledge not to raise taxes on lower- and middle-income families with his large tobacco tax increase back in February. It appears that the increase is not just hurting tobacco consumers, but also hurting workers in the cigar industry.

This health-tobacco legislation raised taxes $65 billion over 10 years. Imagine the damage that would be caused by the giant health bill currently moving through Congress, which will cost $1 trillion or more over 10 years.

Where are My Keys quips, “If only someone had warned people that higher taxes cause jobs to disappear!”