SCHIP: Is Increasing the Tobacco Tax To Expand Coverage a Good Idea?
Publication Date: September 2007
Publisher(s): Tax Policy Center
Special Collection: John D. and Catherine T. MacArthur Foundation
Keywords: Child Health; Economic Well-being; Income and Wealth Distribution; Tax Policy
The original state children's health insurance program (SCHIP) was financed by an increase in the federal excise tax on cigarettes. President Bush has promised to veto legislation passed by the House to renew and expand SCHIP and increase the federal tax to 84 cents per pack because it "clearly favors government-run health care over private health insurance," but he also objects to the financing method, which he calls "a massive, regressive tax increase." While the president is correct that tobacco excise taxes are regressive, the package as a whole benefits low-income families with children and is, on balance, progressive. Published on HealthAffairs.org.