Excise Taxes
Act Now!In 2008, the federal and state governments raised nearly $35.2 billion in tobacco-related revenue from a combination of all tobacco excise taxes, sales taxes, and tobacco settlement payments to the states. Recently, the federal government voted to raise tobacco taxes, and a number of states also are considering raising tobacco taxes again. Click the link below to tell your elected officials "Enough is enough! Stop raising tobacco taxes." The Issue:
On February 4, 2009 the federal government enacted legislation that increased the federal cigarette excise tax (FET) by 61 cents per pack – to $1.01 per pack effective April 1, 2009. Due to these higher costs, adult smokers now face higher tax burdens across the country. On average, $3.10 per pack or 55.8% of the total pack price will consist of taxes or other government costs.
State excise taxes vary widely, ranging from 7¢ per pack in South Carolina to $3.46 per pack in Rhode Island. These state excise taxes raised approximately $15.6 billion in FY 2008, which is in addition to the approximately $8.2 billion the states received in tobacco settlement payments that year. Moreover, eight states have local municipalities that levied additional tobacco taxes, ranging from a penny to $2.00 per pack.
What does this mean for you? If you are an adult smoker it means you pay more money in excise taxes. Federal and state excise taxes alone accounted, on average, for 36.5 percent of the retail price of cigarettes in FY 2008.
Aside from the unfair burden these tax increases place on smokers, tobacco tax increases:
- promote purchases through untaxed or lower-tax venues;
- create incentives for contraband activity;
- harm businesses, including retailers and wholesalers; and
- do little to solve governments’ systemic fiscal problems.
For more information on this issue click here.