Thursday, January 15, 2009

House passes bill to raise fed tobacco taxes

Here's an update, and it's a sad update on the SCHIP topic for smokers. :(


The U.S. House of Representatives passed a bill Wednesday to raise federal tobacco taxes and expand the State Children’s Health Insurance Program.

The $33 billion bill would raise federal taxes on cigarettes, cigars, rolling paper and other tobacco products to help fund the expansion. Cigarette taxes would rise from 39 cents per pack to $1.

Congressional Democrats previously pushed to extend the program to uninsured middle-class children, but efforts were vetoed by President Bush, who wanted the federal program geared toward the poor. President-elect Barack Obama is expected to sign the SCHIP expansion if it gains Senate approval.

House Democrats backed the expansion saying it will bring health insurance to more uninsured children.

The federal tobacco tax increase, however, faces criticism from economic conservatives.

“Tobacco tax increases over the years have resulted in less smoking and therefore a decline in tobacco tax revenue. Tying the expansion of a government program to a declining revenue source is the sort of backward thinking that makes taxpayers scratch their heads,” said Steve Voeller, president of the Arizona Free Enterprise Club.

A group of conservative economic groups wrote members of Congress earlier this month saying continued tobacco tax increases scapegoat smokers and hurt retailers and other small businesses by sending buyers online where they often can avoid such taxes.

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