Major Tobacco Tax Increase Set For Wednesday

Tobacco users are about to take a major tax hit.

Beginning Wednesday, the single largest federal tobacco tax increase ever takes effect to finance a major expansion of health insurance for children. Other tobacco products will see similarly large tax increases.

The major cigarette makers raised prices a couple of weeks ago, partly to offset any drop in profits once the per-pack tax climbs from 39 cents to $1.01.

Medical groups see the increase in the midst of a deep recession as a great incentive to help persuade smokers to quit. Dr. Timothy Gardner, president of the American Heart Association, notes that when tobacco taxes rise, usage drops.

Congress also is considering legislation to empower the Food and Drug Administration to regulate tobacco.

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