Barack Obama is planning to raise taxes on tobacco to fund a plan to provide pre-school education to all American four-year-olds, a senior administration official said on Friday. This is from the Financial Times…
“This proposal would give all our kids the best start early in life, and save hard-working families thousands each year in childcare costs,” the official said. It was “fully paid for in this budget by raising taxes on cigarettes and other tobacco products”.
The federal excise tax on cigarettes in the US is $1.01, and was last raised in early 2009 as part of one of the president’s first pieces of legislation to provide health cover for uninsured children.
Obama administration officials have not yet specified how high they would like to see the tobacco tax raised, though it might have to be substantial to cover the cost of the education proposal. Analysts have estimated the plan could cost $10bn or more over 10 years.