Congress Should Not Finance SCHIP Expansion With Cigarette Tax Increase, Editorial States

"Maryland is only the latest state to prove the folly of trying to finance" health care and other programs with a "tax on a shrinking pool of smokers," and federal lawmakers should "take note," a Wall Street Journal editorial states.

According to the editorial, Maryland lawmakers, who last year increased the state cigarette tax to $2 per pack to fund health care programs, today are "scratching their heads" after a subsequent 25% decrease in cigarette sales has left the state in "fiscal distress again." The decrease in sales has resulted in large part because more Maryland residents have begun to purchase cigarettes across state lines or online to avoid the tax, and New Jersey, New York and Washington state have experienced similar trends, the editorial states.

At the federal level, "Democrats are planning one more pre-election go at a $35 billion" SCHIP expansion that they would finance with a 61-cent-per-pack increase in the federal cigarette tax, the editorial states. They "justify the new levy as a 'sin tax,'" but, "if Americans don't start sinning a whole lot more, states and Uncle Sam are going to go broke," the editorial concludes (Wall Street Journal, 8/11).