Friday, January 30, 2009

Dollar-a-Pack Tobacco Tax Looks Like a Sure Thing

While Congress still needs to resolve differences between the House and Senate version of the State Children’s Health Insurance Program (SCHIP) expansion, the goal of prevention advocates to raise the Federal tobacco excise tax to $1 per pack now seems assured. Both House and Senate versions of the bill include a 61 cent increase in the Federal cigarette excise tax (current tax is 39 cents) with similar increases in the tax on other tobacco products. Tobacco control experts believe the increase, which will fully fund the SCHIP program expansion, will help an estimated 1 million adult smokers to quit and two million kids from starting.

One remaining issue of concern for Partnership is the difference in how the House version of the bill treats the tax increase on so-called little cigars. Partnership believes little cigars, which look and are packaged identical to cigarettes except for a brown tobacco wrapper, should be taxed at the same rate as cigarettes; a provision that is contained in the Senate version of the bill. Final action on the legislation is expected to be swift with Congress committed to presenting a final bill to President Obama before the scheduled congressional district work period that begins February 16.


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