The federal tax on tobacco products, and cigarettes in particular, has received extensive debate in both the U.S. House and Senate. Currently, the proposed new tax rate is $1.00 per package, which is an increase of 61 cents. The current federal tax on a single pack of cigarettes is 39 cents (Tobacco Free Kids, 2007). The last time Congress voted to raise the cigarette tax was in 1997, when it approved a 15-cent increase. This tax went into effect in January 2000 with 10 cents and another 5 cents followed in January 2002. This is a selective excise tax. The first federal cigarette tax was introduced in 1960. The amount was 8 cents while the cost of a pack of cigarettes was 28 cents. The tax was equal to one third of the price paid by consumers. Currently the average price of a pack of cigarettes is $4, while the 39 cent tax represents 10% of the cost. To return to the 1960 rate of 31 percent, the federal tax would require an increase of 94 cents per package. Additionally, the federal cigarette tax has not kept pace with the consumer price index. For the government to change this situation, the proposed tax increase would have to be $1.12 per pack. In contrast, the tax on cigarettes in foreign countries ranges from more than $2.00 to nearly $10.00 per pack. The expected benefits from a tax increase would be additional revenue of $9.4 billion, a decline in cigarette sales, and a decrease in youth sales. “The general consensus is that every 10% increase in the real price of cigarettes reduces overall cigarette consumption by approximately 3-5%, reduces the number of young smokers by 3.5% and reduces the number of children smoking by 6 or 5%. seven percent." (Tobacco Free Kids.org, 2007)Qu... half the paper......those who are unable to purchase them at this price will be forced to quit smoking, which in turn will reduce the outlook for health care costs in our country.ReferencesCampaign for tobacco-free children (2007). org/reports/Entin, Stephen. (2004). /cda04-12.cfmFleenor, Patrick. (2007). SCHIP, Cigarette Taxes and Crime. Retrieved January 27, 2008, from http://www.taxfoundation.org/blog/show/22484.htmlSparkNotes LLC. Equilibrium: Government Intervention in Markets. Retrieved January 27, 2008, from http://www.sparknotes.com/economics/micro/supplydemand/equilibrium/section2.rhtml.