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Smokers Gasp at Highest Tax Hike Ever

They're hit twice as companies boost their profits, too

By Ambreen Ali, Newser User

Posted Apr 1, 2009 2:13 PM CDT

(Newser) – Smokers are feeling pinched by today's 62-cent hike in the federal cigarette tax, the biggest ever. Federal taxes now top $1 per pack, CNN reports. At the same time, manufacturers and retailers have raised prices to boost dwindling profits. "They're picking on smokers," an 83-year-old said of the government. "I'm not going to quit smoking, regardless of what they do."

Proceeds from the higher tobacco tax, which President Obama authorized in February, will help expand state health insurance to an additional 4 million kids. Although some taxpayers prefer taxing nonessentials to increasing levies on fuel or food, smokers say they feel targeted as the price of an average pack jumps to $4.80. "I personally smoke cigars to relax," says one. "Why am I being punished for it?"

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Tobacco users are facing a big hit this week as the single largest federal tobacco tax hike in history takes effect. (AP Photo/Carolyn Kaster, File)

Tobacco companies bumped up prices to compensate for the tax hike and their declining profits. (AP Photo/Esteban Felix, File)

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The manufacturers took what they needed to maintain their profit margin and take care of what they think will be diminishing sales. - Mary Szarmach, vice president of Cigarette Store Corp.

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Smokers Gasp at Highest Tax Hike Ever