Federal Cigarette Tax

Increasing the Federal Cigarette Tax

Increasing taxes on cigarettes are a win-win proposition: significantly increasing cigarette taxes results in fewer kids starting to smoke and in more adults quitting, while at the same time providing substantial revenue to the federal government for important health programs.

In January 2009, Congress passed and President Obama signed a re-authorization and expansion of the Children's Health Insurance Program (CHIP). The legislation passed by wide margins in both the House of Representatives and the Senate. CHIP provides health insurance to many of the 8-9 million uninsured children in the U.S. The re-authorization is a win-win for the American Lung Association. It will expand health insurance to over 4 million more children, including those with asthma. It was funded by a variety of tax increases on tobacco products, most prominently a $.62 increase in the tax on a pack of cigarettes, bringing the total federal tax to $1.01 – a significant increase, which will reduce tobacco consumption especially among youth.