WASHINGTON — Congressional Democrats have chosen an unlikely source to pay for the bulk of their proposed $35 billion increase in children’s health coverage: people with relatively little money and education.
The program expansion passed by the House and Senate last week would be financed with a 156 percent increase in the federal cigarette tax, taking it to $1 per pack from the current 39 cents.
Low-income people smoke more heavily than do wealthier people in the United States, making cigarette taxes a regressive form of revenue.
Democrats, who wrote the legislation and provided most of its votes, generally portray themselves as champions of the poor. They do not dispute that the tax plan would hit poor communities disproportionately, but they say it is worth it to provide health insurance to millions of modest-income children.
All the better, they say, if higher cigarette taxes discourage smoking.
“I’m very happy that we’re paying for this,” said Senate Majority Leader Harry Reid, D-Nev., noting that the plan would not add to the deficit. “The health of the children is extremely important. In the long run, maybe it’ll stop people from smoking.”
Congress probably will revisit the cigarette tax issue soon because President Bush has pledged to veto the proposed $35 billion expansion of the State Children’s Health Insurance Program. The decade-old program helps families buy medical coverage if their income is too high to qualify for Medicaid.
Both political parties seem inclined to pay for it through a tax on an unpopular group, cigarette smokers.
The demographics of smoking and taxation received scant attention during last week’s House and Senate debates, perhaps because many Democrats and Republicans agree that cigarettes are the best target for tax increase if the insurance program were to grow. A few lawmakers, however, took a swing.
“I know there is very little sympathy for smokers these days,” Rep. Jack Kingston, R-Ga., said during the House debate. “But it is still a tax increase on the backs of the smokers. And in order to get enough money to pay for this, it would require 22 million new smokers.”
Rep. Frank Pallone, D-N.J., defended putting the burden of expanded medical care on smokers.
“The tobacco tax is a great way to pay for it,” he said, “because if you tax people who are smoking and they smoke less, then we have less health problems.”
If the federal cigarette tax nears $1 per pack, smokers in many states will pay hefty sums. On top of the federal tax, New Jersey levies a $2.57 per pack tax on cigarettes, followed by Rhode Island at $2.46.
Washington state is the third highest in the nation: $2.025 a pack.
Three states tax cigarettes at less than 30 cents per pack. South Carolina is the lowest at 7 cents.
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