In Obama’s proposed 2016 budget, one thing quietly included is a raise in the federal cigarette tax.
In 2009, the feds raised the cigarette tax from $0.39 a pack to $1.01 a pack. Obama is proposing in his 2016 budget raising that tax again to $1.95 a pack. The money would go toward CHIP and preschool programs and would raise $95 billion a year annually.
(For someone that smokes a pack a day, this would raise the cost of their habit by $343 a year or $28.60 a month.)
It’s actually kind of difficult to find news about this, one of the places I found it was on a website for convenience store owners, who are understandably interested in the proposal.
I’m all for it. I think you can overtax cigarettes to the point at which you’re encouraging smokers to drive out to the nearest Indian Reservation or buy bootleg cigarettes, but 94 cents a pack, seven years after the last raise (from a ridiculously low 39 cents a pack), does not strike me as being onerous.
Of course, there’s no telling if this proposal is dead-on-arrival with a Republican Congress. Republicans not only tend to be anti-tax, they tend to be recipients of a lot of Big Tobacco campaign dollars.