Taxes on all tobacco products are set to rise Wednesday, with more hikes expected this year.

The federal tax on tobacco will be the highest in history after it’s raised 62 cents to $1.01 on a pack of cigarettes. The tax on loose tobacco, used to create homemade cigarettes, will rise $24 dollars from 78 cents per pound. Both hikes are aimed at funding an expansion of the State Children’s Health Insurance Program over the next four years.
 
Even after the federal tobacco tax hike, Michiganders can expect their loose tobacco, cigars and snuff and to cost more. Gov. Jennifer Granholm’s budget calls for doubling the tax on these tobacco items while leaving the tax on cigarettes, which is $2 per pack, as is. If Granholm’s tax increase is approved, taxes on non-cigarette tobacco would make up 64 percent of their wholesale prices.