[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 2486 Introduced in Senate (IS)]

103d CONGRESS
  2d Session
                                S. 2486

To amend the Internal Revenue Code of 1986 to extend the deduction for 
 health insurance costs of self-employed individuals, to increase the 
           taxes on tobacco products, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

           September 30 (legislative day, September 12), 1994

 Mr. Kohl (for himself and Mr. Chafee) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to extend the deduction for 
 health insurance costs of self-employed individuals, to increase the 
           taxes on tobacco products, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. 2-YEAR EXTENSION OF DEDUCTION OF HEALTH INSURANCE COSTS OF 
              SELF-EMPLOYED INDIVIDUALS.

    (a) Extension.--Section 162(l)(6) of the Internal Revenue Code of 
1986 is amended by striking ``1993'' and inserting ``1995''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1993.

SEC. 2. INCREASE IN TAXES ON TOBACCO PRODUCTS.

    (a) In General.--
            (1) Cigars.--Subsection (a) of section 5701 of the Internal 
        Revenue Code of 1986 (relating to rate of tax on cigars) is 
        amended--
                    (A) by striking ``$1.125 cents per thousand (93.75 
                cents per thousand on cigars removed during 1991 and 
                1992)'' in paragraph (1) and inserting ``$1.359 per 
                thousand''; and
                    (B) by striking paragraph (2) and inserting the 
                following new paragraph:
            ``(2) Large cigars.--On cigars weighing more than 3 pounds 
        per thousand, a tax equal to 15.41 percent of the price for 
        which sold but not more than $36.25 per thousand.''
            (2) Cigarettes.--Subsection (b) of section 5701 of such 
        Code (relating to rate of tax on cigarettes) is amended--
                    (A) by striking ``$12 per thousand ($10 per 
                thousand on cigarettes removed during 1991 and 1992)'' 
                in paragraph (1) and inserting ``$14.50 per thousand''; 
                and
                    (B) by striking ``$25.20 per thousand ($21 per 
                thousand on cigarettes removed during 1991 and 1992)'' 
                in paragraph (2) and inserting ``$30.45 per thousand''.
            (3) Cigarette papers.--Subsection (c) of section 5701 of 
        such Code (relating to rate of tax on cigarette papers) is 
        amended by striking ``0.75 cent (0.625 cent on cigarette papers 
        removed during 1991 or 1992)'' and inserting ``0.91 cent''.
            (4) Cigarette tubes.--Subsection (d) of section 5701 of 
        such Code (relating to rate of tax on cigarette tubes) is 
        amended by striking ``1.5 cents (1.25 cents on cigarette tubes 
        removed during 1991 or 1992)'' and inserting ``1.81 cents''.
            (5) Snuff.--Paragraph (1) of section 5701(e) of such Code 
        (relating to rate of tax on smokeless tobacco) is amended by 
        striking ``36 cents (30 cents on snuff removed during 1991 or 
        1992)'' and inserting ``43.50 cents''.
            (6) Chewing tobacco.--Paragraph (2) of section 5701(e) of 
        such Code is amended by striking ``12 cents (10 cents on 
        chewing tobacco removed during 1991 or 1992)'' and inserting 
        ``14.5 cents''.
            (7) Pipe tobacco.--Subsection (f) of section 5701 of such 
        Code (relating to rate of tax on pipe tobacco) is amended by 
        striking ``67.5 cents (56.25 cents on chewing tobacco removed 
        during 1991 or 1992)'' and inserting ``81.6 cents''.
    (b) Floor Stocks.--
            (1) Imposition of tax.--On cigars, cigarettes, cigarette 
        paper, cigarette tubes, snuff, chewing tobacco, and pipe 
        tobacco manufactured in or imported into the United States 
        which is removed before January 1, 1995, and held on such date 
        for sale by any person, there shall be imposed the following 
        taxes:
                    (A) Small cigars.--On cigars, weighing not more 
                than 3 pounds per thousand, 23.4 cents per thousand.
                    (B) Large cigars.--On cigars, weighing more than 3 
                pounds per thousand, a tax equal to 2.66 percent of the 
                price for which sold, but not more than $6.25 per 
                thousand.
                    (C) Small cigarettes.--On cigarettes, weighing not 
                more than 3 pounds per thousand, $2.50 per thousand.
                    (D) Large cigarettes.--On cigarettes, weighing more 
                than 3 pounds per thousand, $5.25 per thousand; except 
                that, if more than 6\1/2\ inches in length, they shall 
                be taxable at the rate prescribed for cigarettes 
                weighing not more than 3 pounds per thousand, counting 
                each 2\3/4\ inches, or fraction thereof, of the length 
                of each as one cigarette.
                    (E) Cigarette papers.--On cigarette papers, 0.16 
                cent for each 50 papers or fractional part thereof; 
                except that, if cigarette papers measure more than 6\1/
                2\ inches in length, they shall be taxable at the rate 
                prescribed, counting each 2\3/4\ inches, or fraction 
                thereof, of the length of each as one cigarette paper.
                    (F) Cigarette tubes.--On cigarette tubes, 0.31 cent 
                for each 50 tubes or fractional part thereof; except 
                that, if cigarette tubes measure more than 6\1/2\ 
                inches in length, they shall be taxable at the rate 
                prescribed, counting each 2\3/4\ inches, or fraction 
                thereof, of the length of each as one cigarette tube.
                    (G) Snuff.--On snuff, 7.5 cents per pound and a 
                proportionate tax at the like rate on all fractional 
                parts of a pound.
                    (H) Chewing tobacco.--On chewing tobacco, 2.5 cents 
                per pound and a proportionate tax at the like rate on 
                all fractional parts of a pound.
                    (I) Pipe tobacco.--On pipe tobacco, 14.1 cents per 
                pound and a proportionate tax at the like rate on all 
                fractional parts of a pound.
            (2) Liability for tax and method of payment.--
                    (A) Liability for tax.--A person holding cigars, 
                cigarettes, cigarette paper, cigarette tubes, snuff, 
                chewing tobacco, and pipe tobacco on January 1, 1995, 
                to which any tax imposed by paragraph (1) applies shall 
                be liable for such tax.
                    (B) Method of payment.--The tax imposed by 
                paragraph (1) shall be treated as a tax imposed under 
                section 5701 of the Internal Revenue Code of 1986 and 
                shall be due and payable on February 15, 1995, in the 
                same manner as the tax imposed under such section is 
                payable with respect to cigars, cigarettes, cigarette 
                paper, cigarette tubes, snuff, chewing tobacco, and 
                pipe tobacco removed on January 1, 1995.
            (3) Cigars, cigarettes, cigarette paper, cigarette tubes, 
        snuff, chewing tobacco, and pipe tobacco.--For purposes of this 
        subsection, the terms ``cigar'', ``cigarette'', ``cigarette 
        paper'', ``cigarette tubes'', ``snuff'', ``chewing tobacco'', 
        and ``pipe tobacco'' shall have the meaning given to such terms 
        by subsections (a), (b), (e), and (g), paragraphs (2) and (3) 
        of subsection (n), and subsection (o) of section 5702 of the 
        Internal Revenue Code of 1986, respectively.
            (4) Exception for retail stocks.--The taxes imposed by 
        paragraph (1) shall not apply to cigars, cigarettes, cigarette 
        paper, cigarette tubes, snuff, chewing tobacco, and pipe 
        tobacco in retail stocks held on January 1, 1995, at the place 
        where intended to be sold at retail.
            (5) Foreign trade zones.--Notwithstanding the Act of June 
        18, 1934 (19 U.S.C. 81a et seq.) or any other provision of 
        law--
                    (A) cigars, cigarettes, cigarette paper, cigarette 
                tubes, snuff, chewing tobacco, and pipe tobacco--
                            (i) on which taxes imposed by Federal law 
                        are determined, or customs duties are 
                        liquidated, by a customs officer pursuant to a 
                        request made under the first proviso of section 
                        3(a) of the Act of June 18, 1934 (19 U.S.C. 
                        81c(a)) before January 1, 1995, and
                            (ii) which are entered into the customs 
                        territory of the United States on or after 
                        January 1, 1995, from a foreign trade zone, and
                    (B) cigars, cigarettes, cigarette paper, cigarette 
                tubes, snuff, chewing tobacco, and pipe tobacco which--
                            (i) are placed under the supervision of a 
                        customs officer pursuant to the provisions of 
                        the second proviso of section 3(a) of the Act 
                        of June 18, 1934 (19 U.S.C. 81c(a)) before 
                        January 1, 1995, and
                            (ii) are entered into the customs territory 
                        of the United States on or after January 1, 
                        1995, from a foreign trade zone,
        shall be subject to the tax imposed by paragraph (1) and such 
        cigars, cigarettes, cigarette paper, cigarette tubes, snuff, 
        chewing tobacco, and pipe tobacco shall, for purposes of 
        paragraph (1), be treated as being held on January 1, 1995, for 
        sale.
            (c) Effective Date.--The amendments made by this section 
        shall apply with respect to cigars, cigarettes, cigarette 
        paper, cigarette tubes, snuff, chewing tobacco, and pipe 
        tobacco removed after December 31, 1994.
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