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Home > What's New > Another Veto for SCHIP -- Federal Cigar Tax Stays Capped at 5 Cents
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Another Veto for SCHIP -- Federal Cigar Tax Stays Capped at 5 Cents
Posted: Thursday, December 13, 2007
By David Savona
President Bush vetoed the latest State Children's Health Initiative Program yesterday, stopping a tremendous increase in the federal tax rate on cigars.
The controversial child health care program, known as SCHIP, revolves around a $35 billion expansion, funds for which would come from higher cigarette and cigar taxes. The current federal excise tax on large cigars is 20.7 percent of the manufacturer's selling price, capped at five cents. The Congressional plan called for that tax to soar to 52.988 percent with a cap of $3 per cigar.
Bush vetoed the original SCHIP expansion on October 3.
Congress could attempt another veto override, but it's unlikely given the short time remaining on the congressional schedule before the holidays. The Associated Press reported today that The House voted 211 to 180 late Wednesday to put off a vote on overriding the president's veto until January 23. Most believe SCHIP will stay put for now, and Congress will renew the fight in 2008, an election year.
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