From http://www.ncsl.org/default.aspx?tabid=14177

Advocates note that tax increases not only raise money for health care, but encourage more people to quit by making cigarettes more expensive. Some, however, argue that cigarette taxes hurt the very people that State Children's Health Insurance Program (SCHIP) is supposed to help. Data from the Department of Health and Human Services and the Heritage Foundation (see below) show that the majority of smokers have incomes below 200 percent of the federal poverty level. The Heritage study also points out that 22.4 million new smokers will be needed by 2017 to fund SCHIP at the proposed level. Additionally, a new study from the Tax Foundation indicates that the proposed federal tax would take more from poorer families than any other proposed tax to raise SCHIP funds.