Michigan Governor Calls for Big Tax Hikes on Tobacco, Vaping, Gaming

It hasn’t happened yet, but Michigan smokers, vapers and casino players may want to brace themselves. Governor Gretchen Whitmer is proposing significant tax increases on tobacco, vaping products and gaming revenue as part of her upcoming budget plan.

What Whitmer Is Proposing

Whitmer’s 2027 budget proposal, presented to the Legislature on February 11, calls for raising the per-pack tax on cigarettes from $2 to $3 and increasing the wholesale tax on other tobacco products from 32% to 57%. Vaping products and nicotine patches, which are currently untaxed, would also be hit with a new 57% wholesale tax.

The move is expected to generate an estimated $95 million annually for public health programs and youth mental health services.

The governor’s budget proposal also targets Michigan’s lucrative gaming industry, seeking higher taxes to help stabilize the state’s General Fund as federally funded pandemic-era subsidies begin to expire.

Why These Tax Hikes?

State Budget Director Jen Flood told WTVB the measures are part of a “responsible mix” of revenue enhancements and efficiencies intended to protect healthcare coverage for roughly 2.5 million Michigan residents who receive Medicaid assistance.

Political Pushback and Debate

Whitmer’s so-called “sin tax” proposal is already drawing criticism from Republican lawmakers, who argue the higher taxes would disproportionately impact working families and lower-income residents across Michigan. They say the increases could create new financial hardships at a time when many households are already dealing with higher everyday costs. The pushback signals that these proposed tax hikes could become one of the biggest and most closely watched budget battles in Lansing this year.