WASHINGTON – Congressional Democrats have chosen an unlikely source to pay for the bulk of their proposed $35 billion increase in children’s health coverage – people with relatively little money and education.
The program expansion passed by the House and Senate last week would be financed with a 156 percent increase in the federal cigarette tax, taking it to $1 per pack from the current 39 cents. Low-income people smoke more heavily than do wealthier people in the
United States, making cigarette taxes a regressive form of revenue.
The demographics of smoking and taxation received scant attention during last week’s House and Senate debates, perhaps because many Democrats and Republicans agree that cigarettes are the best target for tax increase if the insurance program were to grow.
“The tobacco tax is a great way to pay for it,” he said “If you tax people who are smoking and they smoke less, then we have less health problems.”
If the federal cigarette tax nears $1 per pack, smokers in many states will pay hefty sums into government coffers unless they kick their habit. On top of the federal tax, New Jersey levies a $2.57 per pack tax on cigarettes, followed by Rhode Island at $2.46.
California is near the middle, at 87 cents a pack. Three states tax cigarettes at less than 30 cents per pack. South Carolina is the lowest at 7 cents.