Obama Budget Attacks Tobacco … Again

Obama Budget Proposes $.94 Per Pack Federal Cigarette Tax Increase and Proportionate Increase in All OTP Tax Rates

Today, President Obama delivered to Congress his administration’s proposed budget that includes a $.94 per pack increase in the federal cigarette tax rate and an increase in all other tobacco tax rates by a similar proportion. This means that the Obama Administration’s proposal would raise the federal cigarette tax to $1.95 per pack (a 93% increase in the cigarette tax) and a similar proportionate increase in the tax rates on cigars, pipe tobacco, roll-your-own tobacco and smokeless tobacco products. If enacted into law by Congress, these cigarette and tobacco tax increases would go into effect on January 1, 2014.

These proposed cigarette and tobacco tax increases are estimated to raise $78 billion over the next ten years to fund the President’s initiative to extend preschool education to all four year olds from families with low to moderate incomes.

Below is the language from President Obama’s 2014 Budget Submission to Congress that summarizes the proposed cigarette and tobacco tax increases. The actual proposed tax rates are not referenced in the summary.

  • Increase tobacco taxes and index for inflation.
  • Under current law, cigarettes are taxed at a rate of $50.33 per 1,000 cigarettes. This is equivalent to just under $1.01 per pack, or approximately $22.88 per pound of tobacco. Taxes on other tobacco products range from $0.5033 per pound for chewing tobacco to $24.78 per pound of roll your-own tobacco.
  • The Administration proposes to increase the tax on cigarettes to $97.65 per 1,000 cigarettes, or about $1.95 per pack, increase all other tobacco taxes by about the same proportion, and index the taxes for inflation after 2014. The Administration also proposes to clarify that roll-your-own tobacco includes any processed tobacco that is removed for delivery to anyone other than a manufacturer of tobacco products or exporter. The rate increases would be effective for articles held for sale or removed after December 31, 2013.

President Obama’s Entire Budget In One Chart

8 Responses

  • Higher prices are rough, but if they are making plans to do thinks like make an extra year of schooling with the money, that’s at least a sign that they won’t be illegalizing tobacco anytime soon. They need our $$!!
    If we play it right, we could even offer some new taxes, to get some new great things in our country….including some more public smoking areas, perhaps even a few indoor spots!

  • I never thought it would be banned – just taxed like crazy. That is what has happened in every country other than the US. I don’t see any positive in this at all, just darkness and pain for the pipe community.
    207 lbs and counting . . .

  • IMO the only legitimate reason to over-tax tobacco products is to support a completely public health care system, and even then, only to a certain extent. Using people that have an dependance and a certain substance, like smokers(or alcoholics, etc.)to foot more than their fair share of the tax bill, by taxing said substance and counting on the fact that a large number of them won’t be able to quite when the taxes increase, is morally dubious. Sadly it is the way politicians world-wide think, using people’s weaknesses to exploit them. Now I’m depressed!

  • From a post in the PM Forums:
    “The pipe smoking lobby in Washington is small, compared to the cigarette and cigar lobbyists. Actually, non-existent, from what I can find. I’m wondering why blenders like C&D, McClelland, and GL Pease aren’t going to bat, trying to put a voice in Washington for the pipe smokers in the country. And not just the blenders, but the retailers, both B&M and internet. It is, after all, their livelihood…”
    I could never understand this, either. All I see is a wringing of hands, bend over and take it. If there is a “pipe smoking lobby,” it’s not just small, it’s infinitesimal to non-existent. Look, I’d love to be wrong about this and be shown otherwise. Where is OUR CRA?

  • The only way we have a chance is if the tobacco industry and all users of all types stand together. They will never outlaw tobacco but taxes us to death they will do. Everyone needs to let their voices be heard. The dem. and rep. may fight and change many parts but the tobacco taxes they want fight about unless they hear from us.

  • I believe that any taxation should benefit those taxed. Anything else is oppression, plain and simple. The politicians may pretend that this tax is for one reason or another. The real reason is a mean spirited disregard for smoker’s rights. There is a nasty punitive tone to this type of legislation. It is time for a tax rebellion.

  • This sort of idiocy is something that could literally “come around” and bite the FDA in the tail. if indigenous Americans find out about what COULD be to come…
    …does anyone here think that Native Americans from tribal ethnicities that do have tobacco-related and based traditions going back into prehistory — most of whom seem to live east of the Rockies — are going to tolerate having another piece of their tribal traditions taken from them, after a half a MILLENIUM of maltreatment at the hands of European-ethnicity immigrants, and their descendents?
    This COULD get, as they say, “interesting” if the human rights issue regarding the “other tobacco products’ taxation explosion” repeatedly comes up in talks over Obama’s budget “priorities” in the coming months…!