WASHINGTON – U.S. Senators Frank Lautenberg (D-NJ), Richard
Durbin (D-IL), Tom Harkin (D-IA) and Richard Blumenthal (D-CT) have introduced
the Tobacco Tax and Enforcement Reform Act, legislation that would reduce
illegal tobacco trafficking, eliminate tax disparities between different
tobacco products and increase the federal excise tax rate on tobacco products.
According to a press release, the bill would help the
federal government and states collect billions of dollars in tobacco tax
revenues, which currently fund children's health insurance programs, while also
helping to lower youth tobacco consumption and combat illegal tobacco
smuggling.
“Black market cigarette sales and tobacco tax loopholes are
robbing our public coffers of funding we need to support vital programs for
children,” said Lautenberg. “This legislation not only raises revenue for
critical children’s health programs, it will also lower youth smoking, because
we know that youth tobacco consumption falls when tobacco taxes rise.”
“Under current law, loopholes in the taxes on tobacco
products and insufficient regulations regarding tobacco trafficking mean that
cheaper sources of tobacco remain too easily accessible to children and teens.
Curbing tobacco use by our kids is an achievable goal and with these reforms,
we can help spare future generations of young people from this deadly
epidemic,” said Durbin.
“This bill will help keep cancer-causing tobacco products
away from kids, and enable the government to collect taxes that fund tobacco
cessation programs and other important health initiatives,” Harkin said.
“Tobacco taxes are a critical source of funding for states, and at a time when
budgets are tight at every level, they can’t afford to lose billions of dollars
to black market tobacco sales.”
“This measure will help to stop tobacco tax disparities and,
in keeping with the President’s budget blueprint, raise taxes on all forms of
tobacco — decreasing the likelihood that children will become addicted to this
life-shortening product while also raising revenue for states and the federal
government. Additionally, the labeling reforms required by this measure will
help law enforcement better identify criminals and terrorists who profit from
the illegal trade of tobacco — strengthening our national security and keeping
us safe from harm,” said Blumenthal. “For years the tobacco industry
maliciously misled consumers about the harmfulness of tobacco, and I’m proud to
sponsor a measure that will equitably tax all forms of this product for the
public good.”
The bill would eliminate tax disparities between tobacco
products. Under current law, small cigars and roll-your-own tobacco products
are taxed at the same level as cigarettes; while, cigars, smokeless tobacco and
pipe tobacco are taxed at a lower rate. In addition, the bill would raise the
federal excise tax rate on all tobacco products by 93%, which is consistent
with President Obama’s budget proposal to raise tobacco taxes.
To address tobacco smuggling, the bill would require that packages
of tobacco products be uniquely marked to aid law enforcement efforts to track
and trace tax payments on tobacco products. It bans the sale, lease and
importation of tobacco product manufacturing equipment to unlicensed persons.
The bill prevents the illegal re-entry of tobacco products intended for export
by requiring export warehouse proprietors to file reports with the Treasury
Department. It also increases penalties for violating the law and establishes
new offenses.