Chicago Approves 20-Cent Cigarette Tax Hike

Published in CSP Daily News

California groups push tax increase on smokes

CHICAGO -- The Chicago City Council Wednesday approved a 20-cent tax increase on each pack of cigarettes sold in the city, said the Associated Press.

The cigarette tax increase was part of Mayor Richard M. Daley's $5.2 billion budget passed Wednesday by the City Council.

When the cigarette tax increase takes effect on Jan. 1, 2006, the total tax on a pack of cigarettes in Chicago will be $3.05. That figure includes county, state and federal taxes.

In other tobacco news, hospitals, children's advocates and [image-nocss] anti-smoking groups said Tuesday that they will join forces to seek voter approval for a new $2.60-a-pack tax on cigarettes in California, averting a potential showdown between two separate measures that were headed for the ballot next year, reported the Sacramento Bee.

If it qualifies for the November ballot and passes, the new initiative would provide an estimated $2.27 billion annually for universal children's health insurance, emergency-room care, smoking prevention, disease research and other health-related programs, said the report. It would raise the average price of a pack of cigarettes, now selling for close to $4, to more than $6.50.

Almost half of states have enacted tobacco surcharges higher than California's, currently 87 cents per pack of cigarettes. If the proposed increase were to go into effect, California would have the nation's highest tobacco tax, the report said.

The groups are hoping their joint strength will help them if they face opposition from the tobacco industry, which historically has fought tax increases.

Bill Phelps, a spokesperson for tobacco manufacturer Philip Morris USA, told the newspaper that the company has not yet taken an official position on the new measure. But Phelps said PM USA is generally opposed to excessive taxation, and we would view this proposal as excessive.

Phelps said the new taxes could lead to increased illegal smuggling and counterfeiting of cigarettes. And, he said, We think excessive excise taxes are unfair to adult smokers.