Cigarette Tax
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Excise taxes are fixed price taxes that the federal government levies on specific goods or activities, such as gasoline, tobacco and gambling. Since January 1, 2002, the federal excise tax on tobacco products has stood at 39 cents per pack. Recently, the U.S. House of Representatives voted to increase cigarette taxes by 42 cents per pack to fund the Children’s Health and Medicare Protection (CHAMP) Act, to expand children’s health care and provide increased Medicare coverage for seniors.
The CHAMP Act concerns funding for the State Children’s Health Insurance Program (SCHIP), which provides federal grants for states to establish health care programs for low-income children, including 118,500 children in Michigan. Under the CHAMP Act, the 42 cent increase will also be used to cover preventative care for seniors under Medicare, for diabetes screening tests, screening for glaucoma, bone mass measurement, mammography screening and tests for prostate and colorectal cancer.
When the U.S. House of Representatives considered the CHAMP Act, there was not a separate amendment that allowed me an opportunity to vote on the 42 cent cigarette tax increase, as this increase was included in the base bill. Despite my concerns regarding an increase in the cigarette tax to help pay for children’s health insurance for 11 million children and preventative medical services for seniors, I believe the benefits of the legislation were worth the 42 cent cigarette tax increase.
Recently, the Senate passed a version of this bill, which included a 61 cent increase in the cigarette tax. The differences between the House and Senate bills must be now reconciled. The resulting bill, or “conference report,” must then go back to the House and Senate for a final vote before it may be signed into law. When this conference report comes before the House for a vote, there will be no opportunity to offer amendments or alter the final bill.
