A Credible Financing Plan?

By September 27, 2007Health Care, Taxation

With Senate passage of SCHIP expansion now expected, a few not-so-random observations about its financing mechanism: a 61 cent increase in the tobacco tax. From the Indianapolis Star:

WASHINGTON — Indiana smokers, who recently absorbed a state tax increase, would pay higher federal taxes to expand a federal-state children’s health insurance program under a bill approved by the House on Tuesday…[snip]

The bill would raise the federal cigarette tax 61 cents, to $1 per pack. Indiana recently increased the state cigarette tax 44 cents to 99.5 cents to pay for a new state health insurance plan for low-income Hoosiers.

From the Capital Times, Madison, Wisconsin on current budget discussions between Governor Doyle and legislators:

Doyle and Democrats want to impose new taxes on oil companies and hospitals to pay for road projects and health care. They would expand the availability of health insurance to 98 percent of the state’s residents, including all children, raise the tax on cigarettes by $1.25 per pack and double a fee paid by sellers of homes.

From David Harsanyi’s blog:

Today, Department of Revenue agents will begin targeting Tennessee motorists who are spotted buying “large quantities of cigarettes in border states” – and naturally, they will be charging them with a crime and in some instances also seizing their cars.

From the MacKenzie Institute, Canada, a 1994 report, on smuggling and other crimes involved in black-market cigarettes, after the dramatic increase in tobacco taxes: “Sin-Tax Failure: The Market in Contraband Tobacco and Public Safety.”

Leave a Reply