Federal Cigarette Tax

The federal cigarette tax is a $1.00 tax that is levied on each pack of cigarettes sold in the United States and its territories. This is not the only tax on cigarettes, state and city governments also There are many that think the tax is too high, and many that say it’s not high enough. While the funding that these taxes provide May proponents of the tax say it is good policy since it will discourage people from starting smoking and it will encourage people to

History of the Cigarette Tax

In 2009 the House of Representatives, and then the Senate, both passed legislation that would raise the federal cigarette tax 156% to the $1.00 it is now. Prior to this, the cigarette tax on the federal level was only 39 cents. This pales in comparison to the $5.85 of state and local tax a smoker will pay per pack in New York City.

The federal tax hike was expected to cue states to do the same. Many states during the last few years have imposed fines on those who violate smoking bans, as well as raised state taxes on tobacco products.

The Debate

The battle lines between personal freedom rights and personal safety rights have been drawn. Those who want to keep young people from starting smoking cite medical care costs. Some say the healthcare costs of smoking exceed $10 per pack. Those against raising taxes and who are fighting for personal freedom talk about lowered social security costs because death comes earlier, and the probability of black market tobacco.

Both sides are right. There will be black market tobacco if taxes are raised to an exorbitant level, as some say they are now. Smoking does cost taxpayers more in medical care. If federal taxes on cigarettes continue to increase, we may also see taxes on things like soda, fast food and candy. Is this going to solve the health care crisis? If the tax money goes for research instead of balancing federal budgets, it may, but that is not likely.

Resources:

http://www.tobaccofreekids.org/research/factsheets/pdf/0097.pdf
http://www.tobaccofreekids.org/research/factsheets/pdf/0222.pdf
http://www.ncsl.org/default.aspx?tabid=14349
http://www.taxfoundation.org/news/show/24208.html

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