$2-Per-Pack Cigarette Tax Clears First of Legislative Hurdles

Marlboro Lights Cigarettes

California lawmakers decided not to make smoking people pay more for health insurance, but they may be more ready to make smokers pay more for cigarettes.

A new bill proposing to increase the tax on cigarettes by $2 per pack cleared its first two committee votes last week in predictably partisan votes. SB 768, by Sen. Kevin de Leon (D-Los Angeles), would boost the cigarettes price to over $8 per pack and produce about $1.4 billion per year. De Leon suggests the money be used to balance costs of medical care for smoking-related ilnesses, anti-tobacco education and quitting smoking programs.

The Senate Governance and Finance Committee endorsed the bill in a 5-2 vote and the Senate Committee on Health accepted it 6-2. All “yes” votes were Democrats. All “no” votes were Republican.

California, which hasn’t raised taxes on cigarettes since 1998, now gets 87 cents on each cigarette pack and is on the 33rd in the country in tobacco taxation. De Leon’s bill would move the state into fourth place.

Michael Ong, an associate professor of medicine at UCLA School of Medicine who also carries out health economic study, said to legislators the time was right for a increase in cigarette costs.

Lifting the tobacco tax will preserve smoking rates low and save the state money — “a win-win for all Californians,” Ong said.

Earlier this year, California legislators discussed and eventually made the decision against enabling health insurers to charge smokers higher premiums than non-smokers. The Affordable Care Act includes provisions that give insurers the alternative to consider tobacco consumption when identifying premium rates. A new cigarette tax is also on the national agenda. The Tobacco Tax and Enforcement Reform Act, launched in the U.S. Senate in April by four Democratic senators would boost the federal excise tax on tobacco products and raise money to fund children’s health insurance programs and quitting smoking programs.

The bill, presented by Frank Lautenberg (N.J.), Richard Durbin (Ill.), Tom Harkin (Iowa) and Richard Blumenthal (Conn.), would tax all tobacco products at the same rate and increase excise taxes by 93%. The bill also is going to crack down on tobacco trafficking and smuggling.

The federal legislation and de Leon’s California bill would not conflict. The price of cigarettes in California could climb by over $2 a pack and state authorities might obtain greater profits if both pieces of legislation are passed.

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