The cost of lighting up is soon going to be anything but light. On Feb. 4, President Obama signed a law that will increase the tax on tobacco products in order to fund the State Children’s Health Insurance Program, which makes healthcare more affordable for children from low-income families. In addition to the federal tax increases, a bill that would raise Michigan’s tobacco tax is currently being debated by state representatives. While the proceeds from these taxes would support an important program, placing the burden of paying for it solely on smokers is both unfair and inequitable. Legislators should find a new way to pay for S-CHIP that distributes the fiscal responsibility of paying for it across a more reasonable tax base.
The federal tax increase affects all tobacco products, but loose tobacco is facing the most significant change — from a $1.10 per pound tax to a whopping $24.78 per pound tax. On top of the national tax hike, the bill under consideration by Michigan’s House of Representatives proposes to increase the state tobacco tax from 34 to 64 percent. The state and federal tax increases would both go toward S-CHIP.
Certainly, S-CHIP ought to receive full support in government budgets. Ensuring that every child has access to health care is an obligation that both the state and federal governments need to honor because no child should be denied access to a healthy life on the basis of family income. When taxes are needed to support programs like S-CHIP, reasonable tax increases are more than justifiable. And during tough economic times, we might expect to see higher taxes on tobacco going to pay for programs like this as other revenue sources decline.
But it’s simply unfair to place the entirety of this burden on the shoulders of tobacco users through such a massive tax increase. According to the Center for Disease Control, 20.8 percent of all U.S. adults smoke but 30.6 percent of adults below the poverty line are smokers. This means that this massive tax increase disproportionately impacts the individuals who are least able to afford it. Lower-income individuals also have the greatest difficulty in reducing their use of tobacco because they cannot easily afford products like nicotine patches that might help them overcome their addictions. And according to the American Lung Association, about 20 percent of college students smoke. These taxes, then, also fall to cash-strapped college students for whom smoking is an addiction, not something they can just give up due to rising costs.
Since the federal tax increase on tobacco was already approved, the federal government should now concentrate on providing better assistance to low-income smokers whose options for quitting are few. At the state level, Michigan legislators should consider alternate methods of funding S-CHIP that distribute the financial responsibility more equitably.
Funding S-CHIP to ensure the health of underprivileged children is a good use of resources, but sticking smokers with the bill isn’t the best method of paying for it. Low-income smokers need to be provided with better access to treatments that can help them quit smoking before their addiction can be taxed so heavily.