Cigarette Tax Increase to Finance SCHIP. January 16, 2009

摘要

On January 15, the House passed H.R. 2, a bill which included increased tobacco taxes to finance State Childrens Health Insurance Program (SCHIP). This legislation was similar to that passed in the In the 110th Congress (H.R. 976 and H.R. 3162) although the initial House proposal had smaller tax increases.. H.R. 2 increases cigarette taxes, the primary source of tobacco tax revenues from 39 cents to $1.00. According to the Joint Committee on Taxation, the cigarette tax will raise $6.4 billion in federal revenues in FY 2010 with all federal tobacco taxes increases raising $7.1 billion. A similar tax increase is contained in the Senate Finance Committee mark. The analysis suggests that state and local governments will lose about $1 billion in cigarette tax revenues and up to $0.5 billion in lost revenues from the tobacco settlement payments. The legislation is now being considered in the Senate. A justification is to discourage teenage smoking, but this effect is probably small; a reservation is that the burden falls heavily on low-income individuals. Taxes on other tobacco products are also increased, although cigarette taxes account for most tobacco revenues.