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Tax On Tobacco Rises In US

by Mike Godfrey, for LawAndTax-News.com, Washington

06 April 2009

A federal tax increase on tobacco products has come into effect in the United States.

Entering into force on April 1, the tax hike raises the cost of the average packet of cigarettes by around USD1 (GBP0.69).

Taxes levied on rolling and chewing tobacco and small cigars have also been increased under the Health Insurance Program Reauthorization Act, which was signed into law by President Obama almost two months ago.

The government aims to use the additional revenue generated by the tax hikes to fund a new healthcare program for uninsured children.

Healthcare organizations are backing the measure - which is the biggest single tax increase ever to be levied on tobacco products in the US - in the hope that it will encourage smokers to consider quitting for good.

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