Key Points:
·Delaware considering filling budget gap by raising tobacco tax.
·The new proposal will increase the tax on each pack of cigarettes to $3.60.
·The parliament is currently discussing a proposal for personal income tax reform.
According to Delaware public news, facing an increasingly severe budget deficit, lawmakers in the state of Delaware have submitted a proposal to raise the cigarette tax by $1.50 across the state, while also increasing the tax rates on other types of tobacco products. This measure is seen as part of the state government's efforts to seek new sources of revenue in the face of continued budget growth exceeding projections.
Legislators are pushing for a proposal to increase the tobacco tax. According to Delaware Governor Matt Meyer's budget speech in March 2025, he proposed a 50-cent increase in tax per pack of cigarettes, but the revised amount proposed by the legislature is three times that, while also increasing the tax rate on other tobacco products from 30% of the wholesale price to 45%.
If the proposal is passed, the cigarette tax in Delaware will increase from $2.10 per pack to $3.60, higher than the $2.60 and $2.70 taxes in Pennsylvania and New Jersey, but still lower than the $5 or higher standard in Maryland and New York.
Speaker of the House Melissa Minor-Brown pointed out that raising tobacco taxes can not only increase state revenue, but also serve as an effective smoking cessation measure, particularly in reducing the prevalence of youth smoking. Data from the American Lung Association shows that the tobacco use rate among high school students is as high as 18.3%, while the rate among adults is 16.2%.
Although some opponents within the state believe that a tobacco tax is regressive, Governor Minot-Brown stated that reducing over $500 million in tobacco-related medical expenses is the responsibility of the entire state population, therefore, this policy needs more support. If the bill successfully passes through the legislative body and is signed into law within three weeks, it will officially take effect in September of this year.
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