WASHINGTON -- A Senate bill would more than double the current 39-cents-per-pack federal tax on cigarettes, CSP Daily News has learned.
A proposal by Senator Gordon Smith (R-Ore.) to raise the federal tobacco tax to $1a 156.4% increasepassed the U.S. Senate earlier this year but was not included in the final 2008 budget. Smith introduced the proposal to expand funding of the State Children's Health Insurance Program (SCHIP), which provides health care coverage to low-income children.
While Smith recently expressed disappointment [image-nocss] that his tax-increase proposal was not included in the final budget package, he is reintroducing the measure with hopes of securing passage next year. I plan to work with my colleagues on the Finance Committee to see that this policy is a part of any SCHIP reauthorization package to ensure America's children have access to the care, he said in a statement.
Already, at least one major tobacco interest group is exhorting tobacco outlets and convenience store operators to lobby against the proposal.
We view the proposal as over taxation and are urging our members through special alerts to call their U.S. Senators and Representatives in Washington, D.C., Tom Briant, executive director at the National Association of Tobacco Outlets (NATO), told CSP Daily News. In addition, we are providing our members with petitions for their employees and customers to sign opposing the tax increases.
He added, With all of the industry's combined efforts, we hope that this excessive tax increase is defeated and that Congress finds a more broad-based, alternative revenue source to fund the [SCHIP].
Briant emphasized that he is not questioning the merits of SCHIP, which enjoys bipartisan support.. Rather, he questioned why Smith is seeking to penalize a certain segment of the population smokers and sellers of tobacco to finance the program's expansion.
NATO is urging Congress to seek out a more broad-based revenue source to fund the SCHIP program that would not havethe financial consequences to retailers and avoid the safety issues inherent with such a large tax hike, he said.
What senators and representatives need to understand is that by increasing these taxes by such a large amount, there will be even a greater impetus for black market cigarette and tobacco sales. Moreover, crime will increase substantially when wholesaler warehouses and retail stores are targeted by criminals looking to steal a highly priced and easy sold product like cigarettes and tobacco products.
Congress has no place in proposing a federal tax increase of this magnitude when doing so will put wholesalers and retailers at risk of robberies and personal injury.
[Learn more in the July issue of CSP magazine about how NATO is fighting the federal tobacco tax measure.]
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