AWMA Opposes Legislation to Increase the Federal Excise Tax on Cigarettes
AWMA opposes language contained in the 2008 Budget Proposal that expresses support for increasing the federal excise tax on cigarettes by as much as 61 cents to $1.00 per pack.
The current federal excise tax is 39 cents.
If enacted, the monies to be secured from the increase would be earmarked to fund the State Children’s Health Insurance Program.
The Senate (by a vote of 59 to 40) approved Sen. Gordon Smith’s amendment simply expressing the sense of the Senate in support of this increase in the federal excise tax.
While the vote is non-binding, it does increase the likelihood that the Senate will support such an increase during budget negotiations.
The last increase in the federal cigarette excise tax was in January 2002.
AWMA opposes any increase in cigarette excise taxes because of the unintended consequences of such action. Increases in these taxes provide additional incentives for smokers to find alternative avenues to purchase cigarettes – many of which are illegal such as over the Internet where taxes are avoided.
Excessive excise taxes can lead to increased traffic in other forms of illegal cigarette activity.
Tobacco products are already very heavily taxed in the U.S. and this legislation would adversely impact the wholesale distribution industry while providing no real benefit.
