Packwood Predicts No Reduction in Tax on Cigarettes

Senate Finance Committee Chairman Bob Packwood, leaving the door open for some sort of tax hike, predicted today that Congress will boost some federal fees and scuttle a scheduled cut in the 16-cent cigarette tax.

“If I were betting--and this is just a hunch because we haven’t even addressed ourselves to that task--my hunch would be the (cigarette) tax will be extended,” the Oregon Republican said in an interview with wire service reporters. “It won’t be raised. It won’t be lowered, but it will be extended.”

The cigarette tax, raised to 16 cents per pack in January, 1983, is scheduled to go back to 8 cents in October. The Reagan Administration estimates the 16-cent tax will produce $5.2 billion in fiscal year 1985.

With Congress considering dramatic spending cuts to reduce the annual federal deficit of about $200 billion, there is some sentiment on Capitol Hill that lawmakers should not let the tobacco tax drop.