Congress is looking for smart ways to offset its tax cut.

Here’s an easy one. Eliminate a bizarro tax policy that rewards smoking (and consuming alcohol), tilts the tax system IN FAVOR of foreign production, and costs the federal government $12 billion in taxes owed. All at once!

The House tax bill closes this crazy “Excise Tax Loophole.” But the Senate markup foolishly retains it.

Under this multi-billion-dollar tax scam, the U.S. government sends “refund” checks to foreign tobacco companies. These refunds are supposed to be offsets for excise taxes paid when cigarettes are imported into the United States. But in many cases the excise taxes are never collected. So the excise tax is lower on foreign than domestic cigarettes.

Many taxpayer advocacy groups have demanded that Congress end this quirky giveaway. As the analysts at Citizens Against Government Waste put it recently: “tobacco companies are moving their manufacturing overseas to avoid paying the excise tax on cigarettes.”

The whole point of the excise tax is to discourage smoking and promote health. How dumb is this tax dodge?

The Senate should adopt the House reforms.