Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, February 28, 1993 TAG: 9302280065
SECTION: NATIONAL/INTERNATIONAL PAGE: A-5 EDITION: METRO
SOURCE: The Washington Post
DATELINE: WASHINGTON LENGTH: Medium
$2-PER-PACK CIGARETTE TAX PROPOSED
President Clinton is reviewing proposals that include raising federal taxes on cigarettes as high as $2 a pack to provide money for health care, proposals that have the support of the departments of Treasury and Health and Human Services, sources said.The $2 "monster cigarette tax" is favored by some health specialists on the president's health-care task force, who have estimated it would raise $35 billion a year that could help finance health coverage for some of the 37 million uninsured Americans.
The current federal tax on a pack of cigarettes is 24 cents. State taxes on a pack, which costs an average of $1.90 nationally, varied last year from 51 cents in Massachusetts to 2.5 cents in Virginia.
Increasing federal taxes on cigarettes, which Clinton said Thursday he is considering, is one of the revenue-raising mechanisms his health-care task force is studying. Additional taxes on health-care providers, taxing some health benefits and increasing Medicare premiums for wealthy seniors are also being considered.
In an upcoming issue of Health Affairs, an academic journal, two health-care specialists who are members of the task force's working group on financing health care argue that a $2-a-pack tax is a "particularly attractive" way to raise money to pay for health coverage for uninsured Americans.
The idea of taxing cigarettes has wide support in the health community and among members of Clinton's administration and the public.
By boosting cigarette taxes, proponents say, the Clinton administration would send a two-pronged health message: First, that the administration is committed to using its political clout to deal with preventable health risks; second, that it is willing to take on a powerful interest group - the tobacco companies - to raise money for national health care.
The Virginia General Assembly last week gutted a bill to restrict public smoking and strengthened job protections for smokers. The tobacco industry was a major contributor to state legislative races, spending more than $70,000 on winning campaigns in the state in 1991.
"This tax is of enormous social value," said Alan Davis, chairman of the Coalition on Smoking OR Health, an anti-smoking umbrella organization for the American Heart Association, the American Lung Association and the American Cancer Society. "The regressivity of the tax would be cyclical. You would send money back into the communities that need it most."
Most objections to a tax on cigarettes are based on the argument that the tax is regressive - hitting low-income people harder than high-income people.
"We're sure in the end that President Clinton will decide that a regressive tax on the middle class is not the way to fund health care," said a spokeswoman for the Tobacco Institute. "An excise tax falls harder on the people who can least afford to pay."
To health advocates, however, the tax's regressivity is a positive feature because it hits some consumers where they are likely to respond - in the pocketbook.
"Taxing cigarettes is the one way we know for sure stops smoking. There's a direct correlation," said Howard Temin, a Nobel laureate for his discoveries in molecular biology and a member of the National Cancer Institute Advisory Board. That board last month approved a resolution supporting a tax of at least $2 per pack.
In 1981, the latest year for which figures are available, more than 434,000 Americans died from health problems caused by smoking, the national Centers for Disease Control said. Smoking is the No. 1 cause of preventable deaths in the United States, and is responsible for about one-fifth of all deaths.
The federal government estimates that the cost of smoking-related illness and death to the nation is about $65 billion a year.