Is George wrong in vetoing this proposal, considering that the likely decline in smoking would mean that the program would end up coming out of general funds and make the deficit situation even worse?
Possibly, if the only reason for raising the tax was raising revenue then Bush could make that argument.
However, that isn't the only reason to raise the tax, and it is questionable if the decline in smoking would entirely offset the increase in tax.
Plus, Bush has other reasons to oppose any tax. First, he is making a lot of political hay against Democrats right now by saying they are pro-tax and have some secret scheme to push a huge tax increase in the near future. Second, much of his administration falls into the Norquist camp of government and taxation.
Jay