Healthcare Blog

American Indian Leaders Weigh In On Federal Cigarette Tax Increase

April 01, 2017

Indian Country Today on Friday examined the effect of a 62-cent-per-pack increase in federal taxes on cigarettes to fund the CHIP expansion, which could affect American Indians' smoking rates. President Obama signed the legislation on Feb. 4, and the increase -- which affects all cigarettes, including those sold on reservations -- is set to take effect April 1.

Studies indicate that American Indians have higher rates than other populations for smoking, which has been linked to cancer, heart disease and other health ailments, Indian Country Today reports. Patricia Henderson -- a physician, member of the Navajo Nation and vice president of the not-for-profit Black Hills Center for American Indian Health in Rapid City, S.D. -- said that increasing taxes on cigarettes would encourage many American Indians to quit or reduce their smoking, as well as prevent many young people from starting to smoke.

Henderson said sovereign American Indian nations can impose taxes on cigarettes they sell on their reservations and even tax them at higher rates than the state's rate. She said, "If you increase taxation, Native communities can earmark those dollars to help health-related programs for their tribe."

She added, "Tribal leaders need to begin to understand the basic mechanism of what commercial tobacco does to the human body and not just see it as an income generating commodity, but something that is harming their communities."

There has been "a long-running tobacco tax war" between state officials and reservation smoke shops, "which often generate the main revenue stream for tribal governments to provide services to their members," according to Indian Country Today.

American Indian reservations in New York state are among those that refuse to collect any state taxes on cigarettes sold to non-tribal members on their reservations. Tribal members are exempt from state taxation on products purchased on reservations, according to Indian Country Today. Sally Snow of the Seneca Nation tribe and president of the Seneca Free Trade Association, said, "We don't want to impose any kind of taxation on our territory at all."

Instead retailers pay a 75-cent-per-carton fee to the tribal government, which is used for health care, education and other services for tribal members. Chief Harry Wallace, an attorney and owner of a reservation smoke shop in New York, said, "We know [smoking] is a hazard. ... No one else will ... (provide medical services) for us and the only way we can do it is by entering into this necessary revenue stream" (Toensing, Indian Country Today, 2/27).

Reprinted with kind permission from kaisernetwork. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at kaisernetwork/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork, a free service of The Henry J. Kaiser Family Foundation.

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