The US Congress and President Obama passed legislation to increase federal tobacco taxes including a 62-cent increase in the cigarette tax and an immediate increase in the tax on so-called "little cigars" to $1.01 per pack. Congress also expanded the State Children’s Health Insurance Program (SCHIP), which will be funded in part by the newly increased tobacco tax.

Increasing tobacco taxes is a proven strategy to reduce smoking and other tobacco use, according to the Campaign for Tobacco-Free Kids, with studies showing that every 10% increase in the price of cigarettes reduces youth smoking by 7%. Polling conducted for the Campaign for Tobacco-Free Kids found that more than 66% of all voters support a significant increase in the federal cigarette tax to provide health care coverage to uninsured children.

According to Matthew L. Myers, president of the Campaign for Tobacco-Free Kids, the cigarette tax increase is expected to keep 2 million fewer kids from starting to smoke, help more than 1 million adult smokers quit, and prevent nearly 900,000 smoking-caused deaths. Additionally, the tax increase will produce $44.5 billion in long-term health care savings by reducing tobacco-caused health care costs.