Cigarette tax jumps 62 cents nationally

Wednesday marked the largest federal tobacco tax increase in U.S. history.

The tax increase – from 39 cents per pack to more than a dollar – will help fund a majority of the Children’s Health Insurance Program Reauthorization Act of 2009, which provides health insurance to children and low-income families.
 
Federal guidelines allow each state to determine the design of its individual CHIP program. States will decide eligibility parameters, benefit packages and administrative procedures.

The bill was vetoed twice under the name of State Children’s Health Insurance Program during the Bush administration before President Barack Obama signed the legislation’s third attempt into law Feb. 4.

Dean of Students Dick McKaig said he supports the legislation and thinks the increase in cigarette tax will motivate smokers to quit their habit.

“What I’ve read shows increased prices on alcohol and cigarettes tends to reduce the use of the product,” McKaig said. “Educational information about the negative effects of usage is not always enough motivation to quit, but this could be a solution, and if people succeed to quit then we’ve made progress.”

IU employee Mary Pearson said she disagrees with the tax increase and doesn’t think it will keep people from smoking.

“People have to have their mind made up and the willpower to stop,” Pearson said. “You can’t force people to stop by increasing the prices. It has to be their own free will.”

In March 2007 the state cigarette excise tax rates per pack was .555 cents, according to the National Conference of State Legislatures Web site. In July of that year, the tax rate increased to .995 cents.

Mike Fisher, owner of The Briar and The Burley, a tobacco and luggage shop in Bloomington, said he thinks the law will fail to achieve its goals by not taxing products in moderation.

“You can’t keep increasing taxes on one product expecting it to fund a government program,” Fisher said. “What government doesn’t get is their radical tax increase is punishing a population, and when that population stops buying, (State CHIP) will have no funding.”

Ivy Tech sophomore Devin Childress and Bloomington resident Jesse Eastwood explained their objections to the recent tax increases, saying they enjoy smoking and do not intend to stop.

“It’s absurd,” Childress said. “There’s other ways to buy tobacco. Germany has Web sites where you can order tobacco to be sent over. They’re just going to kill the highest tax revenue America has.”

Eastwood said he thinks the law has a negative impact on non-smokers as well.

“The tax is going to put out businesses, and with that you’ll have taxpayers having to pay for their unemployment,” Eastwood said. “It might have worked if they would have increased in moderation, but it won’t work like this.”