Tobacco Tax Increase Expected To Reduce Smoking
By: Import User
Updated: March 30, 2009
(Washington, DC) -- Smokers are getting hit in the wallet again.
Wednesday, a new federal excise tax on tobacco officially takes effect, but some smokers are already feeling it.
"USA Today" reports earlier this month Philip Morris USA, the manufacturer of Marlboro, Parliament and Virginia Slims, increased prices by 71-cents a pack, nine-cents more than the federal tax increase.
R.J. Reynolds Tobacco, which makes Camel, Kool and Salem cigarettes, bumped wholesale prices up by 44 cents a pack and reduced discounting.
Revenue from the tax increase will be used to expand coverage under the State Children's Health Insurance Program to an additional four-million low-income children.
The increase, which was signed into law in February, calls for a 62-cents-a-pack increase in federal excise taxes on cigarettes for the nation's estimated 45 million cigarette smokers.
The tax hike also effects taxes on little cigars, cigars, and pipe and chewing tobacco.
Some experts think the higher prices will have the positive effect of reducing teenage smoking.
(Copyright 2009 by Newsroom Solutions)
