Congress, President Deliver Historic Victory for Children's Health By Increasing Tobacco Taxes to Fund SCHIP Program

Washington, D.C. — The Congress and President Obama today have delivered a historic victory for the health of America's kids by increasing federal tobacco taxes, including a 62-cent increase in the cigarette tax, and expanding the State Children's Health Insurance Program (SCHIP). The new law will create a healthier future for millions of children by reducing tobacco use — the number one cause of preventable death in America — and expanding health care coverage for kids. The House of Representatives today gave final approval to the legislation, and President Obama signed it into law.

Increasing tobacco taxes is a proven strategy to reduce smoking and other tobacco use, especially among children. Studies show that every 10 percent increase in the price of cigarettes reduces youth smoking by 7 percent and overall cigarette consumption by about 4 percent.

The cigarette tax increase will lead to nearly two million fewer kids starting to smoke, help more than one million adult smokers quit, prevent nearly 900,000 smoking-caused deaths and produce $44.5 billion in long-term health care savings by reducing tobacco-caused health care costs. It is further good news that the final legislation immediately increases the tax on so-called 'little cigars' to $1.01 per pack, the same rate as for cigarettes, addressing a disparity that has made little cigars cheaper and more appealing to kids.

Higher tobacco taxes are a win-win-win solution for the country — a health win that will reduce tobacco use and save lives, a financial win that will raise revenue to help fund the SCHIP program and reduce tobacco-caused health care costs, and a political win that is popular with voters. Polling conducted for the Campaign for Tobacco-Free Kids found that more than two-thirds of all voters support a significant increase in the federal cigarette tax to provide health care coverage to uninsured children.

The tobacco tax increase is a significant step forward and should be the first step in a comprehensive national strategy to reduce tobacco use. The new Congress and President Obama should take action this year to enact long-overdue legislation granting the U.S. Food and Drug Administration authority to regulate the manufacturing, marketing and sale of tobacco products and provide funding for tobacco prevention and cessation programs. These measures not only reduce smoking and save lives; they also are highly cost-effective investments that save money by reducing tobacco-related health care costs. Each year in the United States, tobacco use kills more than 400,000 people and costs the nation $96 billion in health care bills.